India – U.S. Trade Deal: Tariffs Cut to 18% Aims to Boost Bilateral Commerce

The United States and India have reached a framework trade agreement that will reduce U.S. tariffs on Indian exports from previously high levels to 18 per cent, providing a major boost to exporters and enhancing global supply chain efficiency. The announcement, made by U.S. President Donald Trump via social media and confirmed by a joint statement from both governments, signals a shift in trade relations that could spur increased trade volumes and economic cooperation between the two largest democracies.

Under the interim deal, reciprocal tariffs on Indian goods — previously as high as 50 per cent due to combined duties — are being reset at 18 per cent, making Indian products more competitive in the U.S. market relative to regional peers. India has also agreed to lower tariffs and non-tariff barriers on certain U.S. imports, deepening market access and encouraging investment flows. While the framework does not yet include a formal timeline for full implementation, it is expected to lay the groundwork for broader negotiations and expanded market cooperation.

Industry stakeholders anticipate that this move will benefit a range of export-oriented sectors, including textiles, apparel, leather goods, and technology products, while strengthening supply-chain resilience on both sides. Economists also note that deeper trade ties could promote diversification of sourcing and production, reduce costs for consumers and businesses, and enhance competitiveness in global markets.