Tariff Truce In Sight: India And US Edge Toward Game-Changing Trade Deal

Image Source: Free Press Journal

India and the United States are nearing a landmark trade agreement that could slash tariffs on Indian exports from 50% to 15–16%. The move aims to revive export momentum, ease trade tensions, and unlock new opportunities for Indian manufacturers, especially in textiles, pharma, and engineering goods.

A breakthrough after years of gridlock

India and the US are reportedly close to finalizing a long-pending trade pact that could dramatically reduce tariffs on Indian exports. According to reports from Reuters and Mint, the proposed deal would lower duties from the current 50% to around 15–16%, offering a major boost to Indian exporters struggling under steep levies.

The negotiations, which have been stalled for years due to policy differences and geopolitical shifts, have gained momentum in recent months. Commerce Minister Piyush Goyal confirmed that talks are progressing in a “cordial atmosphere,” with both sides committed to resolving long-standing trade irritants.

Exporters eye relief and resurgence

The tariff reduction is expected to benefit several key sectors, including textiles, pharmaceuticals, agriculture, and engineering. These industries have faced declining competitiveness in the US market due to punitive duties imposed earlier this year. In September alone, India’s exports to the US fell by 11.93% year-on-year to $5.46 billion, marking the sharpest drop of 2025.

Trade experts believe the deal could reverse this trend, especially for MSMEs that rely heavily on US demand. The Global Trade Research Initiative (GTRI) warned that without tariff relief, India could face further trade and job losses.

Key highlights of the trade deal progress

- India–US trade pact may reduce export tariffs from 50% to 15–16%
- Talks gaining traction after years of diplomatic deadlock
- Commerce Minister confirms “cordial” negotiations underway
- Sectors like textiles, pharma, and engineering poised to benefit
- India’s exports to US dropped 11.93% in September amid tariff pressure
- GTRI warns of further losses without swift resolution
- MSMEs expected to gain from improved market access
- First phase of the deal likely by fall 2025

A turning point for bilateral trade

If finalized, the trade agreement could mark a new chapter in India–US economic relations. It would not only ease trade flows but also signal a shared commitment to open markets, fair competition, and mutual growth.

Sources: Reuters, Mint, Financial Express, Hindustan Times, Maritime Gateway