Intro: A landmark trade pact promises wider access and lower duties for Indian goods entering America

New Delhi

The India-US Bilateral Trade Agreement marks a major step in India’s global trade strategy and gives exporters steady and preferred access to the huge US market valued at over $30 trillion. An official statement said the deal brings wide tariff cuts, zero-duty access for many products, stronger digital and technology cooperation, and safeguards for farmers, small businesses, and domestic industry.

India exported goods worth $86.35 billion to the United States in 2024. Under the new agreement, several sectors will become more competitive. Tariffs on $30.94 billion worth of exports have been cut from 50 per cent to 18 per cent, while duties on another $10.03 billion have been reduced to zero. This will allow many Indian products to enter the US at lower prices.

Textiles and apparel, which employ millions, will see duties fall sharply, while silk products will enjoy zero duty in a large US market. Machinery exports will also benefit, with tariffs lowered to 18 per cent, opening new opportunities in a market worth $477 billion.

Leather and footwear exports have gained strongly, with India becoming a preferred supplier as duties drop to 18 per cent in a $42 billion market. This is expected to boost jobs, especially in MSMEs and manufacturing clusters.

Gems and jewellery exports will see similar gains, with tariffs reduced to 18 per cent and zero duty access for diamonds, platinum, and coins. Agricultural exports worth $1.36 billion will enter the US without additional duties, helping spices, tea, coffee, fruits, nuts, and processed foods. Sensitive sectors like dairy, meat, poultry, and cereals remain fully protected. The agreement also creates an advantage as rival exporting nations continue facing higher tariffs in the American market compared with India’s products.

India Adopts Decade-Long Tariff Elimination Plan

The Government of India has announced a structured approach to agricultural market access under the India‑US Bilateral Trade Agreement, combining immediate duty elimination, phased cuts over up to ten years, tariff reductions, and quota mechanisms while protecting sensitive crops.

Highly sensitive sectors such as meat, poultry, dairy, GM foods, maize, millets, pulses, certain fruits, oilseeds, honey, ethanol, tobacco, and selected animal feed remain fully protected under an exemption category. Products used by India’s food processing industry, including albumins, coconut oil, castor oil, stearin, and modified starches, will see phased tariff elimination over a decade, providing domestic stakeholders time to adjust.

Certain sensitive items, including olives, pyrethrum, and parts of plants, have received measured tariff reductions, while select goods like in-shell almonds, walnuts, pistachios, and lentils will enter via Tariff Rate Quotas at reduced duties. Alcoholic beverages will follow tariff reduction and minimum import price guidelines, consistent with India’s earlier trade agreements.

Union Commerce Minister Piyush Goyal said Indian agricultural exports to the US will face lower reciprocal tariffs than competitors, with items such as tea, coffee, spices, coconut, coconut oil, and vegetable wax enjoying zero-duty access. India currently maintains a USD 1.3 billion trade surplus in agricultural trade with the US, exporting USD 3.4 billion and importing USD 2.1 billion in 2024.

Goyal assured that India’s farmers, MSMEs, artisans, and craftsmen would not face losses, while benefiting from broader US market access, ensuring a careful balance between opening markets and protecting domestic agriculture.