Representative image for India-US trade.
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United States President Donald Trump has announced that India and the US have agreed to a trade deal, under which Washington will cut tariffs on Indian goods to 18 per cent while India will reduce “tariff and non-tariff barriers against the US to zero”.
The announcement was made following a phone call between Trump and Prime Minister Narendra Modi.
US Secretary for Agriculture Brooke Rollins indicated that India has agreed to allow import of American agricultural goods.
A day after Trump's announcement, Commerce and Industry Minister Piyush Goyal on Tuesday said the agreement was in its final stages of detailing and reiterated that interests of sensitive sectors like agriculture and dairy would be protected.
“Today, 140 crore Indians are celebrating a trade deal, which is under final stages of detailing between the negotiating teams of both countries,” Goyal told reporters. He said a joint statement would be issued by the two countries after finalisation of the details.
In August 2025
In August 2025, US announced a 25% tariff on Indian exports entering American markets along with an additional 25% punitive duty on India for purchasing Russian crude oil and military equipment.
With the reduction in the US tariff to 18%, India now is in the middle of the global tariff spectrum.
A look at US tariff rates across major economies shows that Brazil faces the highest tariffs at 50%. It is followed by countries like Myanmar and Laos that attract 40%. While tariff on China stands at 37%, Canada's exports to US attract 35% tariff and South Africa’s 30%.
Southeast Asian manufacturing hubs such as Vietnam and Bangladesh face a levy of 20%, while Malaysia, Cambodia, and Thailand have rates of 19%.
On the other hand, the European Union, Japan and South Korea each face 15% duty and the United Kingdom faces the lowest rate at 10%.
While the finer details of the trade deal are not known yet, the reduction in tariff is expected to give a boost to many sectors in India. Among the key sectors to benefit are:
Apparel: Tariff cut is likely to boost competitiveness of Indian textile exports. Tamil Nadu's Tiruppur hopes to gain an edge over Vietnam, Bangladesh.
Electronics: Mobile phone exports, which touched Rs 2 lakh crore in financial year 2024-25, could get a further boost with the cut in tariff.
Marine products: Shrimp farmers, traders and exporters In Andhra Pradesh and Tamil Nadu expect a revival of the aquaculture sector with cut in tariff.
Under the pact, India is likely to eliminate duties on certain goods immediately, phase out duties on others, reduce duties in some sectors, and provide quota-based tariff concessions for select products. However, sensitive sectors like dairy and agri are completely out of the ambit of the pact, PTI reported.
An executive order from the US would provide greater clarity on the tariff issues, and a joint statement from both countries will outline the sectors covered under the agreement. Both are awaited.