Sitharaman Welcomes US Tariff Reduction to 18% on Indian Goods

Finance Minister Nirmala Sitharaman on Tuesday said the new trade agreement with the United States, under which tariffs on Indian goods have been sharply reduced, is “good auguring” for India and is expected to give a significant boost to the country’s exports.

Speaking in an interview with PTI Videos, Sitharaman said the tariff cut would help Indian exporters regain competitiveness in the US market after a difficult period marked by steep duties. “So, actually, our exports will pick up now; that is my expectation, along with having found new markets where they will continue to operate,” she said, adding that the move is a positive signal for exporters.

US President Donald Trump has agreed to slash tariffs on Indian goods to 18 per cent, down from the earlier 50 per cent, as part of a broader trade understanding between the two countries. Once implemented, the revised tariff structure would bring India broadly in line with other Asian economies, where duties typically range between 15 and 19 per cent.

Also Read: Nirmala Sitharaman to Meet 30 Students After Union Budget Presentation on February 1

The earlier imposition of high tariffs had weighed heavily on Indian exports, increasing landed costs and squeezing margins for exporters. Sectors such as steel, aluminium, textiles, engineering goods, and certain agricultural products were particularly affected, as higher duties prompted US buyers to divert orders to alternative suppliers.

According to estimates by HSBC Global Investment Research, India’s bilateral trade surplus with the US shrank by about $2.5 billion per month on average between September and December 2025, compared with earlier months, amid the impact of punitive tariffs. The period also saw foreign investor sentiment weaken, with equity outflows of around $14 billion since July 2025.

Sitharaman said the details of the agreement would be announced soon but noted that the new 18 per cent tariff would restore India’s price advantage over key regional competitors such as Vietnam and Bangladesh. The relief is expected to benefit labour-intensive sectors, including apparel, footwear, and jewellery, which had seen order flows decline sharply under the earlier tariff regime.

Also Read: Nirmala Sitharaman Tables Economic Survey in Lok Sabha Today