$48.2 billion of Indian exports to get tariff relief under US trade deal

Prime Minister Narendra Modi and US President Donald Trump

Around $48.2 billion worth of India’s merchandise exports to the United States are now likely to face lower tariffs of 18 percent after both sides agreed to a trade deal on February 2.

The estimate is based on a projection provided by India’s Commerce Ministry in August 2025, which assessed the value of Indian exports that were facing steep 50 percent tariffs in the US.

President Donald Trump announced the trade deal on Truth Social, saying the agreement would significantly reduce the reciprocal tariffs imposed from mid-2025.

Under the agreement, the US will reduce reciprocal tariffs on Indian goods to 18 percent, while duties on American products imported into India are expected to drop to zero, according to Trump.

Indian merchandise exports to the US stood at $86.51 billion in 2024-25. Labour-intensive sectors, which were among the most exposed to higher tariffs, are expected to see significant relief.

Textile exports worth nearly $11 billion and gems and jewellery shipments of almost $10 billion are expected to benefit substantially from the tariff reduction.

Marine product exports valued at $2.7 billion, organic and inorganic chemicals worth $4.2 billion, and leather exports of close to $1 billion are also set to gain from lower duties.

Key exports such as electronics, pharmaceuticals, and petroleum products, which were previously exempt from higher tariffs, will continue to enjoy the same exemptions.

However, Indian exports valued at around $8.3 billion will continue to face higher tariffs of 25 percent or more, as duties imposed under Section 232 of the Trade Expansion Act of 1962 remain unchanged.