Reduced US tariffs of 18% on India come into effect. What it means

The agreement will reduce US reciprocal duties on Indian exports to 18 per cent, while scrapping tariffs entirely on items such as generic medicines, gems and diamonds, and aircraft components—opening up stronger export prospects across several key sectors.

Union Commerce and Industry Minister Piyush Goyal, in a press conference on Saturday, announced a major reset in India–US trade ties, confirming that steep American tariffs on Indian imports have been slashed from 50 per cent to 18 per cent, effective from noon on February 7. The move follows a framework interim trade agreement between the two countries under the broader India-US Bilateral Trade Agreement (BTA), aimed at boosting exports, jobs and market access. The trade deal will formally be signed in March.

Here are key details the Union Minister shared about the India-US trade deal:

The United States has lowered import duties on Indian goods from a punitive 50 per cent to 18 per cent, offering immediate relief to exporters. Piyush Goyal said the revised tariffs take effect from February 7, restoring India’s competitiveness in its largest export destination after months of elevated levies that strained trade flows.

India and the US have agreed on a framework for an interim trade pact focused on reciprocal and mutually beneficial outcomes. The arrangement serves as a stepping stone towards a comprehensive Bilateral Trade Agreement (BTA), with both sides committing to faster implementation and continued negotiations on market access and trade barriers.

The tariff cut is expected to significantly benefit labour-intensive Indian industries such as textiles, apparel, leather, footwear, plastics, rubber goods, organic chemicals, home décor, handicrafts and select machinery. Lower duties are likely to improve price competitiveness and expand order volumes from American buyers.

Under the agreement, tariffs will be eliminated entirely for several high-value Indian exports, including generic pharmaceuticals, gems and diamonds, and certain aircraft parts. These concessions are expected to deliver tangible gains for Indian manufacturers and reinforce the government’s 'Make in India' manufacturing push.