New Delhi: India has landed what officials called a landmark trade win with the United States, securing sustained preferential market access across goods and digital trade and unlocking opportunities in a market valued at over $30 trillion.
The India–US Bilateral Trade Agreement delivers sweeping tariff rationalisation, zero-duty access in multiple categories and a framework that protects sensitive domestic sectors such as dairy, meat, poultry and cereals, according to a government statement.
With India’s exports to the US at $86.35 billion in 2024, the deal materially improves price competitiveness for a large slice of shipments. Of exports earlier hit by steep reciprocal tariffs—some as high as 50%—duties on $30.94 billion worth of goods have been cut to 18%, while another $10.03 billion now gets zero-duty access.
Big gains for labour-intensive sectors
The biggest beneficiaries are textiles and apparel, where tariffs drop from 50% to 18%, and silk gets 0% duty access in a $113-billion US market. The gems and jewellery sector also sees tariffs fall to 18%, with zero-duty access for categories like diamonds and platinum covering a $29-billion market.
Leather and footwear, home décor, toys and machinery and parts (excluding aircraft parts) are among other sectors seeing duties reset to 18%, opening the door to scale up exports into some of the world’s largest consumption and industrial markets. For machinery alone, the addressable US market is estimated at $477 billion, while India’s current exports in the segment are just $2.35 billion, underscoring the headroom for growth.
Agriculture: access with guardrails
On agriculture, the agreement grants zero additional US duty on Indian exports worth $1.36 billion, including spices, tea, coffee, fruits, nuts and processed foods, offering stability to exporters. At the same time, New Delhi has kept highly sensitive segments fully protected, and structured market opening through a mix of phased cuts, quotas and tariff-rate mechanisms to avoid shocks to farmers.
The pact creates a clear tariff differential in India’s favour, with several competing suppliers—such as China, Vietnam and Bangladesh—continuing to face higher duties in the US market. This gap could shift sourcing decisions in labour-intensive and mid-tech manufacturing towards India, industry executives said.
Beyond tariffs: digital and tech cooperation
The agreement also leans into digital trade and strategic technology cooperation, easing access to semiconductor chips, server components and critical tech inputs for India’s data centres and Digital India push. Provisions on standards, conformity assessments and licensing aim to cut compliance costs and reduce double testing for exporters, improving ease of doing business across high-tech and medical devices.
What it means for exports
For exporters, the immediate impact is sharper price competitiveness in the US, India’s largest market. For policymakers, the deal balances export expansion with calibrated protection for sensitive sectors. If execution matches ambition, the agreement could underpin the next leg of export-led growth, deepen supply-chain integration with the US and strengthen India’s hand in global trade realignments.