New Delhi, Feb 9: India has secured sustained preferential access to the United States market valued at over USD 30 trillion following the conclusion of the India–U.S. Bilateral Trade Agreement, according to a several official documents issued on Monday.
The agreement introduces wide-ranging tariff rationalisation across goods and services, significantly improving market access for Indian exports while retaining safeguards for sensitive domestic sectors, including agriculture, MSMEs and core manufacturing industries.
India’s exports to the United States stood at USD 86.35 billion in 2024. Under the agreement, a substantial portion of these exports will now benefit from reduced or zero tariffs, enhancing price competitiveness across key sectors such as textiles, leather, gems and jewellery, machinery, agriculture, home décor, pharmaceuticals and technology-driven industries.
Major Tariff Restructuring
Reciprocal tariffs on Indian products, which earlier went up to 50 per cent, have been substantially reduced. Of the USD 40.96 billion worth of exports previously subject to such tariffs, duties on USD 30.94 billion have been reduced to 18 per cent, while exports worth USD 10.03 billion will receive zero-duty access.
In addition, exports valued at USD 1.04 billion fall under an exemption category with no additional duty. Agricultural products accounting for USD 1.035 billion within this category have been assured zero reciprocal tariffs, providing predictability for exporters.
Under Section 232 provisions, additional duties on exports worth USD 28.30 billion—previously as high as 50 per cent—have been reduced to zero on an end-use basis.
Competitive Advantage Over Other Exporters
The agreement creates a tariff differential favouring India, as several competing exporters continue to face higher duties in the U.S. market, including China, Vietnam, Bangladesh, Indonesia, Thailand and Malaysia. Officials said this is expected to strengthen India’s relative positioning across labour-intensive and manufacturing sectors.
Sectoral Gains
Textiles and apparel exports will see tariffs reduced from 50 per cent to 18 per cent, while silk products will enjoy zero-duty access in a U.S. market valued at USD 113 billion. Leather and footwear exports will also benefit from tariff cuts to 18 per cent in a USD 42 billion market.
Gems and jewellery exports will face an 18 per cent tariff, while key categories such as diamonds and platinum will receive zero-duty access. Home décor, toys and machinery exports—excluding aircraft parts—will also see tariffs reduced to 18 per cent, improving access to markets ranging from USD 18 billion to USD 477 billion in size.
Agriculture: Market Access With Safeguards
India currently maintains a USD 1.3 billion surplus in agricultural trade with the United States. Under the agreement, agricultural exports worth USD 1.36 billion will receive zero additional duty. Beneficiary products include spices, tea, coffee, fruits, nuts, cereals, processed foods and plant-based products.
At the same time, highly sensitive sectors such as dairy, meat, poultry, cereals, oilseeds, pulses, GM foods and select fruits remain fully protected. Limited access for products such as in-shell almonds, walnuts and pistachios has been allowed under tariff rate quotas, while phased tariff elimination of up to ten years applies to select intermediate goods.
Zero-Duty Access for Industrial Exports
The agreement provides zero additional duty access for industrial exports worth USD 38 billion, including aircraft parts, pharmaceuticals, machinery components, gems, chemicals, paper products, plastics, rubber and select home décor items.
Digital Trade and Technology Cooperation
Beyond goods, the agreement strengthens cooperation in digital trade, ICT, semiconductors and advanced technologies. Measures include streamlined licensing, recognition of conformity assessments and improved access to high-performance computing and data centre infrastructure.
India’s digitally delivered services exports stood at USD 280 billion in 2024, making it one of the world’s leading exporters in this segment. Officials said a structured digital trade framework with the U.S. would reduce regulatory friction and expand opportunities for Indian firms, particularly SMEs and technology startups.
Consumer Welfare and Intermediate Inputs
The agreement also allows calibrated access to select consumer-oriented imports, including tree nuts, berries, processed foods, wines and premium beverages, without disrupting domestic supply. Access to critical intermediate inputs—such as specialty chemicals, electronics components, semiconductor materials and battery inputs—is expected to strengthen India’s manufacturing and export value chains.
Strategic Partnership
The government described the agreement as a major step in strengthening India–U.S. economic ties, combining expanded market access with sector-specific safeguards. Officials said the framework balances export growth with domestic protection, positioning India for sustained export-led growth and deeper global integration.
