From 50% to 18% tariffs: Commerce Minister Goyal lists big export wins in India-US trade deal

Commerce Minister Piyush Goyal said the interim trade framework with the US lowers tariffs, boosts Indian exports and fully protects farmers and sensitive sectors.

• India-US interim trade pact cuts reciprocal tariffs from 50% to 18%
• Indian exports like gems, pharma, textiles to get zero-duty access in US
• Sensitive farm products excluded from tariff cuts to protect Indian farmers.

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Less than a week after announcing a trade deal in principle, India and the United States on Saturday released a joint statement outlining the contours of the interim trade framework, offering clarity on tariff reductions, sectoral exclusions and export opportunities.

Addressing a press conference, Commerce Minister Piyush Goyal said the agreement marks a key milestone toward India’s long-term trade ambition with the US.

“The discussions for the Bilateral Trade Agreement that was launched in February 2025 to ensure $500 billion trade every year, in a bid to reach that aim, today will be marked as an important day,” Goyal said.

A central element of the interim pact is a sharp reduction in reciprocal tariffs.

“Reciprocal tariffs will go down from 50 percent to 18 percent. This is a better rate than our direct competitors,” Goyal said.

He compared India’s new tariff levels with peers, noting that China faces tariffs of nearly 35 percent, Vietnam and Bangladesh around 20 percent, and Indonesia about 19 percent.

Several Indian export categories are set to benefit from zero-duty access once the trade agreement is formally signed.

“Many Indian exports will get zero duty when our trade agreement gets signed. Gems and diamonds will enjoy zero duty, generic pharma will enjoy zero duty,” Goyal said.

He added that aircraft parts, machinery parts, elementary auto components, pharmaceuticals, textiles, leather goods, toys, sports goods and Indian silk products would also see zero-duty access in the US market.

Goyal repeatedly underlined that Indian farmers’ interests remain fully protected under the agreement.

“Our farmers’ rights have been protected completely. Dairy has also been protected,” he said.

There are no tariff relaxations on sensitive agricultural categories, including meat, poultry, dairy, soybean, maize, rice, wheat, millets, fruits such as strawberries and cherries, pulses, groundnut, honey and non-alcoholic beverages.

“We have not given any relaxation on GM goods,” Goyal said, adding that ethanol and tobacco were also excluded from concessions.

He dismissed criticism that the deal could hurt Indian agriculture, saying, “People who are misleading India are now stunned by how the US-India agreement will not lead to any agri imports which will hurt Indian farmers’ interests.”

India has agreed to calibrated tariff reductions on certain US goods where domestic supply is limited.

“India will reduce tariffs in a calibrated manner on US goods, keeping our sensitivities in mind,” Goyal said.

These include tariff concessions under tariff rate quotas (TRQs) for items such as extra-long staple cotton, soyabean oil and distillers dried grains with solubles (DDGS). Minimum import prices have been set for US wines and spirits, while alcoholic beverages will see phased duty reductions.

“Animal husbandry shared their requirements. Only that much quantity will be imported from the US,” Goyal said.

Technology, healthcare and imports

The minister said technology imports such as aircraft, semiconductors, chips and high-end machinery would support India’s industrial and national security needs.

“For our national security, we will need Nvidia chips, data centres,” Goyal said.

Tariffs on select medical devices, including pacemakers and cancer-treatment drugs, will be reduced over time to lower costs.

Goyal reiterated India’s long-term goal of expanding trade ties with the US.

“We see $500 billion worth of bilateral trade including goods and services with the US going ahead. Our goal is to increase bilateral trade to $500 billion,” he said, adding, “India supplies top quality product to the world.”

He described the interim pact as “fair, equitable and balanced”, saying it protects India’s sensitivities while giving exporters a significant boost.

“We have shielded farmers from imports and given a boost to our exporters,” Goyal said, adding that this was only the first tranche, with discussions set to continue.