Slashing of US trade tariffs from 50% to 18% will bring big relief and boost exports in textiles, gems and jewellery, marine products, engineering goods, and chemical industries. Goyal emphasised that the trade deal secures and protects the interests of agriculture and dairy sectors and its interests are not compromised.
X: @prashanthamine
New Delhi: Union Commerce Minister Piyush Goyal on Tuesday termed the wrapping up of the India-United States Free Trade Agreement (India-US FTA) as “a big step that indicates that India will progress ahead with speed, best compared to our neighbours in competition, keeps national interests first.”
He emphasised that the trade deal has protected the agriculture and dairy sectors and ensured their interests are not compromised.
On the issue of disclosing the fine print of the trade deal Goyal stated that both India and the US will issue joint statement with details shortly.
As the India-US FTA was finalized, the US slashed its reciprocal trade tariffs on Indian goods exported to the US, from 50% to 18% will bring big relief and boost exports in textiles, gems and jewellery, marine products, engineering goods, and chemical industries.
As the news of the India-US FTA broke out the Sensex jumped 2,072.67 points to settle at 83,739.13; Nifty surged from 639.15 points to 25,727.55. The Indian Rupee jumped 124 paise to close at 90.25 (provisional) against US dollar on India-US trade deal.
Announcing the broad contours of the Indo-US trade deal, Union Commerce Minister Piyush Goyal argued that the trade deal finalised with US is the best when compared to our neighbours and all nations that are in competition with us.
On the most contentious issues of agriculture and dairy sectors in the trade deal, the Union Commerce Minister further stated “the Prime Minister has always remained concerned about our farmers and our brothers and sisters associated with animal husbandry and the dairy sector. He has consistently worked to protect their interests. Prime Minister Narendra Modi has always protected the agriculture and dairy sectors and ensured their interests are not compromised. He has worked continuously to secure a brighter future for people in these sectors, creating opportunities, increasing incomes, and ensuring sustainable growth. At no point has the Prime Minister allowed any compromise on the interests of farmers or those associated with these sectors.”
After year-long discussions between India and the United States, a trade agreement has finally been concluded. Under this agreement, the tariffs imposed by the United States on Indian exports have been reduced from 50 percent to 18 percent.
This decision is expected to provide significant relief to the textiles, gems and jewellery, marine products, engineering goods, and chemical industries. U.S. President Donald Trump announced the agreement on Monday (February 2). This agreement is being regarded as an important milestone in trade relations between the two countries.
Despite high tariffs, India’s exports to the United States have shown growth in recent months. During the period from April to November, India’s exports increased by 11.3 percent to reach USD 59 billion. Smartphone shipments doubled during this period, reaching USD 16.7 billion. With the reduction in tariffs, demand and competitiveness in labour-intensive and export-oriented sectors are expected to increase.
The textiles and apparel industry is expected to be the biggest beneficiary of this agreement. Indian garment exports were facing intense competition from low-cost countries such as Bangladesh and Vietnam. However, with the U.S. tariff reduced to 18 percent—lower than the 20 percent tariff applicable to Bangladesh and Sri Lanka—India may gain an advantage in price competitiveness. The United States accounts for about 28 percent of India’s total textile exports, and in the financial year 2024–25, India exported garments and apparel worth USD 11 billion to the U.S.
According to experts, from the financial year 2027 onwards, apparel and home textile exports could witness double-digit month-on-month growth. As a result, monthly apparel exports could rise from USD 1.27 billion to between USD 1.5 and 1.6 billion. This agreement is expected to help Indian companies compete more effectively in the U.S. market.
The agreement is also considered significant for the gems and jewellery sector. The United States is the largest market for this industry, accounting for around 30 percent of its exports. Due to tariff pressure, exports had declined sharply in recent times. With the reduction in duties, price stability and an improvement in demand are now expected.
Speaking to a news media outlet earlier in the day, US Ambassador to India, Sergio Gor did admit that it took almost four months to finalize the trade deal underscoring the complex and diverse issues that India had to address domestically. He did point out that it had taken 19 years for India and the European Union (EU) to finalize their multilateral trade deal.
As the official announcement was made the Department of Commerce, GoI in a series of posts on X, praised Prime Minister Narendra Modi and US President Donald J Trump.
“The India–US Trade Agreement reflects a holistic economic partnership focused on innovation, job creation, and technology collaboration. With the leadership of Prime Minister @NarendraModi ji and President Donald Trump, the partnership strengthens economic ties and supports shared growth between India and the United States”
Also Read: Year-End: Post 2019 Assembly elections Maharashtra politics has seen “The End of Isms”
“A shared vision for growth brings India and the United States closer through the India–US Trade Agreement. With the leadership of Prime Minister @NarendraModi ji and President Donald Trump, the partnership strengthens trade ties, builds resilient supply chains, and creates new opportunities for businesses across both economies”, says another post.
Meanwhile, Russia has cautiously reacted to US President Donald J Trump claims that India has agreed to stop Russian crude oil purchases.
The Kremlin has said that it has received no official statement from India regarding reports that it would halt Russian oil purchases, following US President Donald Trump’s remarks on the issue. Kremlin officials emphasized that their strategic partnership with India remains “most important” and that they intend to continue developing bilateral ties.
Russia has further said that it would “watch and see” how Indian purchases of its oil develop, following U.S. claims that New Delhi had agreed to halt imports. Deputy Prime Minister Alexander Novak told reporters that Moscow had only seen public statements on the matter and added, “We’ll see how the situation develops.” He also noted that demand for Russian energy remains strong.
