India–US interim trade deal cuts tariffs to 18%

Union Commerce and Industry Minister Piyush Goyal on Saturday laid out the contours of the India–US interim trade agreement, calling it a calibrated and mutually beneficial framework aimed at expanding bilateral trade while safeguarding domestic interests.

Addressing a press conference in Delhi, Goyal said the agreement lowers US tariffs on Indian goods to 18 per cent, unlocks significant market access, and provides targeted relief to key sectors including agriculture, MSMEs, pharmaceuticals and manufacturing.

Tariff relief and export opportunities

Explaining the core outcomes, Goyal said the US has agreed to reduce duties across a wide basket of Indian exports, opening what he described as a “vast global opportunity” for domestic producers. Items expected to benefit include textiles, leather, gems and jewellery, smartphones, pharmaceuticals and select engineering goods.

Several Indian exports will move towards zero-duty access, notably generic medicines, gems and diamonds, and aircraft parts, subject to the full operationalisation of the interim framework.

Concessions with safeguards

On India’s commitments, the minister clarified that tariff concessions offered to the US are quota-based and carefully ring-fenced. Apples from the US will be allowed under a duty concession only above a minimum import price of ₹80 per kg, while limited concessions have also been extended on soybean oil.

Additional tariff relaxations cover alcoholic beverages, cosmetics and certain medical devices, with Goyal stressing that none of these measures compromise Indian farmers or domestic industry.

Boost for manufacturing and aviation

India will gain duty-free access in the US market for specific auto and aircraft components, a move expected to strengthen domestic manufacturing in the automotive and aerospace sectors. The US has also agreed to remove earlier national security-linked tariffs on Indian aircraft parts imposed under metal import proclamations.

Jobs, MSMEs and future pathway

Highlighting the wider economic impact, Goyal said the agreement is designed to directly benefit MSMEs, farmers and fishermen, while increased exports could generate large-scale employment opportunities for women and youth.

He described the interim framework as a stepping stone towards a full Bilateral Trade Agreement, with both countries committing to preferential market access, alignment on standards and conformity assessments, and a safeguard mechanism to address future tariff changes.

India has also indicated its intent to purchase $500 billion worth of US goods—including energy, aircraft, technology products and critical raw materials—over the next five years, alongside deeper technology trade and cooperation, particularly in data centre and advanced computing sectors.