India-US trade deal: Tariffs to drop to 18%, zero duty for key exports | Key highlights from Piyush Goyal's address

Describing the agreement as the “first tranche”, Goyal said discussions will continue to expand cooperation and identify additional areas of mutual benefit.

• India-US trade pact to cut US tariffs on Indian goods from 50% to 18% next week
• Indian exports like pharma, gems, textiles to get zero-duty access in US market
• Farmers' interests and sensitive sectors fully protected under the agreement

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Commerce and Industry Minister Piyush Goyal, on Saturday, said negotiations under the India-US bilateral trade agreement (BTA) have reached a decisive stage, delivering steep tariff cuts for Indian exports, expanded zero-duty access in the US market, and full protection for farmers and sensitive sectors, as both sides work towards a $500-billion annual trade target.

The US has already issued an executive order removing the additional 25% levy on Indian goods, clearing the first hurdle under the interim India-US trade framework, the Union Minister noted.

Addressing the media, Goyal said the remaining reduction in reciprocal tariffs, to 18%, is expected to be formalised through a separate US executive order by next week. “The executive order for removing the 25% additional levy has already been issued by the US. The next executive order, which will bring tariffs down to 18%, should come by next week,” he said.

Key highlights from Goyal’s address

>> $500-billion trade ambition: The BTA aims to scale bilateral trade in goods and services to $500 billion annually. Goyal said Friday’s outcome marks a “very important day” in that journey, with further tranches of negotiations to follow.

>> Reciprocal tariffs cut to 18%: US reciprocal tariffs on Indian goods will fall sharply from 50% to 18%, placing India at a clear advantage over competitors. China faces tariffs of nearly 35%, while Vietnam, Bangladesh and Indonesia face rates of about 20%, 20% and 19%, respectively.

>> Zero-duty access for key exports: Once the agreement is legally signed, several Indian exports will attract zero duty in the US, including aircraft parts, machinery components, generic drugs and pharma products, basic auto parts, gems and diamonds. Smartphones will continue to enjoy zero-duty concessions.

>> Boost for labour-intensive sectors: Textiles, leather, toys, sports goods and Indian silk products are set to gain from reduced or zero duties, improving India’s competitiveness in the US market.

>> Seafood exporters see double gains: Goyal said the marine sector is already “celebrating”, citing a 20% jump in seafood exports following EU market access. Fishermen and exporters in Kerala, Tamil Nadu, Maharashtra, Gujarat, Odisha and Andhra Pradesh are expected to benefit further from improved US access.

>> Gems and jewellery hubs benefit: Gems and diamonds from clusters in West Bengal, Maharashtra, Kerala and Tamil Nadu will see tariff reductions, supporting regional export economies.

>> Agri interests protected: Farmers’ interests and dairy have been fully safeguarded, with no relaxation on genetically modified goods. Sensitive items such as groundnut, honey, malt, non-alcoholic beverages, essential oils, ethanol and tobacco remain protected.

>> Calibrated opening for US imports: India will reduce tariffs in a phased and limited manner on select US goods using tariff rate quotas (TRQs). Concessions include soybean oil, certain medical devices, and wines and spirits subject to a minimum import price.

>> Steel and aluminium tariffs unchanged globally: Goyal noted that the US’s 50% tariffs on steel and aluminium apply uniformly to all countries and are not India-specific.

>> Technology and strategic access: The framework will support access to advanced technologies such as Nvidia chips, data centres, aircraft, semiconductors, high-end machinery and quantum technologies, strengthening India’s industrial and national security capabilities.

>>MSMEs and traditional sectors safe: Goyal said MSMEs, handicrafts and handloom sectors will not be hurt, dismissing concerns that the pact could trigger damaging agricultural imports.

Describing the agreement as the “first tranche”, Goyal said discussions will continue to expand cooperation and identify additional areas of mutual benefit.