India-US trade deal ends uncertainty; Govt foresees economic buoyancy and private investment surge

US President Donald Trump announced the trade deal between India and the US on Truth Social on February 2, saying the agreement would significantly roll back the reciprocal tariffs imposed from mid-2025.

• India-US trade deal reduces uncertainty and may boost economic buoyancy
• US to reduce tariffs on Indian goods to 18%, India to cut duties on US imports.
• No clarity yet on Indian market opening to US agricultural products

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A great deal of uncertainty has been removed post the announcement of India-US trade deal, and we look forward to greater buoyancy in the economy, Department of Economic Affairs Secretary Anuradha Thakur said today.

"Indian economy continues to demonstrate resilience among global uncertainty. A lot of that uncertainty has dropped today morning," said Thakur, while briefing reporters.

US President Donald Trump announced the trade deal between India and the US on Truth Social on February 2, saying the agreement would significantly roll back the reciprocal tariffs imposed from mid-2025. As part of the agreement, Trump claimed the US will cut reciprocal tariffs on Indian goods to 18 percent from 50 percent, while duties on American products imported into India are expected to fall to zero.

Department of Financial Services Secretary M Nagaraju said, "India-US trade deal is a good thing that has happened, and it will help exporters."

He added that “with uncertainty over of the deal, I hope the private sector will now start investing in India."

On the details of the deal, Thakur said that "there is no clarity as of now on the Indian market opening up to U.S. agricultural products."

The comments hold significance, as the US Agriculture Secretary, Brooke Rollins said that the trade deal will improve access to American farm products to “India’s massive market”.

A government official, earlier today, confirmed to Moneycontrol that India is expected to stick to its long-standing position of keeping sensitive agricultural goods and dairy items out of the trade deal with the US, a government official said, indicating these sectors are largely unlikely to be part of any major market-opening commitments.

Impact on Budget numbers and GDP

On the Budget estimates, Thakur said, "When the Budget was prepared, we were working on the situation as it existed then."

She added that "let the deal unfold, and wait for the details, and that will help us see how it will have an impact on GDP and the Budget numbers."

"The deal is a result of very constructive dialogue that has happened," said the DEA Secretary, adding that there is an opportunity for the world’s two largest democracies to work together and take things forward.