US-India Trade: Tariff Cut to 18% to Supercharge Indian Exports, Says Sitharaman
Sitharaman says US tariff reduction to 18% will boost India's exports.
Finance Minister Nirmala Sitharaman on Tuesday said that the reduction of US tariffs on Indian goods to 18 per cent is a major boost for the country’s export sector. She noted that the move would significantly improve India’s competitiveness in the American market and help exporters regain lost momentum after months of trade pressure.
Speaking to PTI Videos, Sitharaman said the tariff cut is a “good augury” for Indian exporters, adding that exports are expected to rise as businesses leverage both renewed access to the US market and alternative markets explored during the high-tariff period. She expressed confidence that Indian exporters are now better positioned to expand globally.
Last year’s steep 50 per cent US tariffs had hurt Indian exports by raising landed costs and squeezing margins, particularly in sectors such as steel, aluminium, textiles, engineering goods, and agriculture. The higher duties prompted several US buyers to shift sourcing to other countries, denting India’s trade performance.
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Under the new understanding announced by US President Donald Trump, tariffs on Indian goods will be slashed to 18 per cent in exchange for India lowering trade barriers and committing to shift oil imports away from Russia toward the US and potentially Venezuela. Once implemented, the deal will align India’s tariff levels with other Asian economies in the 15–19 per cent range.
The revised tariff structure restores India’s price advantage over regional competitors like Vietnam and Bangladesh, which face duties of around 20 per cent. Labour-intensive sectors such as apparel, footwear, jewellery, and handicrafts are expected to benefit the most, after suffering sharp order declines under the earlier punitive tariffs.
Sitharaman also highlighted that the removal of the additional 25 per cent punitive levy linked to Russian oil purchases has effectively brought tariffs down from 50 per cent to 18 per cent. Calling the move “good news for #MadeInIndia products,” she said the agreement would help revive investor confidence, boost exports, and strengthen India’s trade position with the United States in the coming years.
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