The India-US trade pact reduces tariffs on over USD 41 billion of Indian exports, offering duty-free or lower-duty access for sectors such as textiles, gems and jewellery, agriculture, industrial goods and digital services, while protecting sensitive areas like electric vehicles, dairy and meat products
-1770647037651_d.png "India-US trade deal: Tariffs slashed on UDS 30.94 billion Indian goods, how duty-free access will help country's market")
India-US deal reduces tariffs on 41 billion dollars of Indian exports. File Pic
India has announced tariff concessions and market access measures under its trade agreement with the United States, covering automobiles, agricultural products, industrial goods, digital trade and select consumer items.
The government said the pact will significantly improve the competitiveness of Indian exports in the US market.
Under the agreement, tariffs on Indian exports worth USD 30.94 billion will be reduced from 50 per cent to 18 per cent, while reciprocal tariffs on another USD 10.03 billion worth of exports will be completely eliminated.
“This means a substantial share of Indian goods entering the US market will now face either sharply lower tariffs or duty-free access,” the government said, adding that this will improve price competitiveness for Indian exporters according to PTI.
Automobiles, alcohol and sensitive sectors
Sensitive sectors such as automobiles have been liberalised through quota-based access and duty reductions. However, the government clarified that no duty concessions have been granted on electric vehicles.
Alcoholic beverages have been offered access through tariff reduction combined with minimum import price rules, in line with India’s approach in other free trade agreements. Precious metals and other sensitive industrial products are covered under quota-based tariff lowering, while medical devices will see long, staggered tariff reductions.
Big gains for textiles and gems
Textile exports will see tariffs cut from 50 per cent to 18 per cent, while silk will receive zero-duty access, opening opportunities in a USD 113 billion US market.
The gems and jewellery sector will also benefit, with tariffs reduced to 18 per cent for products entering a USD 61 billion market. In addition, zero-duty access has been secured for diamonds, platinum and coins, covering a USD 29 billion market.
Key beneficiaries include cut and polished diamonds, lab-grown diamonds, coloured gemstones, synthetic stones, and articles made of gold, silver and platinum.
Agriculture: protection for sensitive Items
India currently enjoys a USD 1.3 billion trade surplus in agricultural trade with the US. Under the agreement, USD 1.36 billion worth of Indian agricultural exports will face zero additional US duty.
Beneficiary products include spices, tea, coffee, fruits, nuts, coconut products, cereals, bakery items, cocoa products, oilseeds, and processed foods such as fruit pulp, juices and jams.
Market access has been carefully structured based on product sensitivity. Highly sensitive items including meat, poultry, dairy products, genetically modified foods, soyameal, maize and cereals remain fully protected.
Some sensitive products will see partial tariff reductions, while others such as almonds, walnuts, pistachios and lentils will be allowed under tariff rate quotas, permitting limited quantities at reduced duties. Certain intermediate products used by India’s food processing industry will see phased tariff elimination over up to 10 years.
Industrial goods: zero duty for key Indian exports
The agreement provides zero additional duty access for industrial exports worth USD 38 billion. Indian products receiving duty-free access include gems and diamonds, platinum, clocks and watches, essential oils, inorganic chemicals, paper products, plastics, wood articles and natural rubber.
Access for American industrial goods into India has been structured carefully through immediate cuts, phased reductions and quota-based entry, depending on product sensitivity.
Digital trade framework
India’s digitally delivered services exports stood at USD 0.28 trillion in 2024, growing at over 10 per cent year-on-year. India ranks fifth globally in digital services exports. The government said a structured digital trade framework with the US will reduce regulatory uncertainty, lower compliance costs and make cross-border digital services smoother and more predictable.
(With PTI Inputs)
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