- US cuts reciprocal tariffs on Indian goods from 50% to 18% in new trade deal
- India agrees to ease barriers on US imports and reduce Russian oil purchases gradually
- Lower tariffs will reduce prices on pulses, dairy, electronics, and consumer goods in India
US President Donald Trump and Prime Minister Narendra Modi announced a trade agreement that cuts US reciprocal tariffs on Indian goods from 50 per cent to 18 per cent. In return, India has agreed to ease barriers on American imports and gradually halt Russian oil purchases while increasing US energy, technology, and agricultural imports.
This is set to make a range of products more affordable for consumers and businesses on both sides.
What Will Get Cheaper For Indian Consumers?
- Food and Agriculture: Pulses, dairy products, and processed foods could see lower prices as import levies ease.
- Electronics and Tech: Laptops, gadgets, and other tech components may become more competitively priced.
- Consumer Goods: Packaged foods, household appliances, and other imported items could become more accessible due to reduced costs.
For Indian Exports To The US
- Textiles and Apparel: Lower US tariffs will make Indian clothing and fabrics more competitive in the American market.
- Gems and Jewellery: Exporters may gain better pricing and market share.
- Industrial Goods: Steel, chemicals, and engineering products could face fewer trade hurdles, improving access and reducing costs.
What May Remain Expensive
Some industrial items like steel, aluminum, copper, and certain auto components could still carry high tariffs under existing US trade rules, keeping prices relatively elevated.
India-US Trade Deal
This new tariff structure puts India ahead of regional competitors like China, Pakistan, Bangladesh, and Vietnam, which face higher US tariffs, while developed economies like the EU, Japan, South Korea, and the UK enjoy even lower rates.
India imports around 1.5 million barrels per day of Russian crude, over a third of its total imports. Replacing Russian oil with Venezuelan or US crude requires significant investment, given Venezuela's production constraints and infrastructure challenges.
