India–U.S. Trade Breakthrough: Preferential Access to a $30-Trillion Market Fuels Export Growth Across Key Sectors

PIB | 10 February 2026 : ndia has achieved a landmark trade victory with the conclusion of the India–U.S. Bilateral Trade Agreement, unlocking sustained preferential access to the USD 30-trillion United States market. This historic agreement marks a major milestone in India’s global trade engagement and significantly strengthens the country’s position across manufacturing, agriculture, services, and technology-driven industries.

Through comprehensive tariff rationalisation, zero-duty access across large product categories, enhanced digital and technology cooperation, and a carefully calibrated safeguard framework, the agreement delivers growth while protecting India’s farmers, MSMEs, and domestic industry.

Key Takeaways

• India secured preferential access to a USD 30 trillion U.S. market

• Textiles & apparel tariffs reduced from 50% to 18%, with silk receiving 0% duty access in a USD 113 billion U.S. market

• Machinery exports tariffs reduced to 18%, opening opportunities in a USD 477 billion U.S. market

• USD 1.36 billion of Indian agricultural exports receive zero additional U.S. duty access

• Key products including spices, tea, coffee, fruits, nuts and processed foods gain zero-duty treatment

• Highly sensitive sectors such as dairy, meat, poultry and cereals remain fully protected

What India Gets

• A highly competitive rate of 18% on USD 900 billion worth of global U.S. imports

• Zero duty on USD 150 billion worth of global U.S. imports

• No additional duty on USD 720 billion worth of global U.S. imports

• Exemptions continue on USD 350 billion worth of global U.S. imports

• Preferential treatment on 232 tariffs

Strengthening India’s Export Footprint

With India’s exports to the United States standing at USD 86.35 billion in 2024, the agreement significantly enhances competitive access across textiles, leather, gems and jewellery, agriculture, machinery, home décor, pharmaceuticals, and technology-driven sectors.

Major Relief on Reciprocal Tariffs

Reciprocal Tariffs, earlier as high as 50%, applied to USD 40.96 billion of Indian exports. Under the agreement:

• Tariffs on USD 30.94 billion of exports are reduced from 50% to 18%

• Tariffs on USD 10.03 billion are reduced from 50% to zero

This restructuring sharply improves price competitiveness and expands market access for Indian exporters.

Exemption Category – No Additional Duty

Additional structural duty relief ensures zero reciprocal duty access for USD 1.04 billion, including USD 1.035 billion in agricultural exports. This guarantees stability, predictability, and uninterrupted access for Indian farmers and agri-exporters.

Section 232 (End-Use Basis) Commitments

Under Section 232 provisions, USD 28.30 billion worth of exports receive zero additional duty, with tariffs that earlier could reach 50% now reduced to zero.

A Clear Competitive Edge for India

The agreement creates a strong tariff differential in India’s favour. While Indian products face reduced duties, competing exporters continue to face higher tariffs, including China (35%), Vietnam (20%), Bangladesh (20%), Malaysia (19%), Indonesia (19%), Philippines (19%), Cambodia (19%) and Thailand (19%).

This advantage significantly strengthens India’s positioning in the U.S. market across labour-intensive industries, manufacturing segments, and high-value product categories.

Sectoral Gains

Textiles & Apparels

Tariffs reduced from 50% to 18%, with silk at 0% duty, opening opportunities in a USD 113 billion market. Benefiting products include garments, carpets, cotton and man-made textiles, bed linen, curtains, yarn, baby clothing, blankets and gloves. The sector is expected to see job creation, MSME growth and stronger global value-chain integration.

Leather & Footwear

Tariffs reduced from 50% to 18% in a USD 42 billion market. Finished leather, footwear and components gain improved access, supporting employment and MSME-led manufacturing.

Gems & Jewellery

Tariffs reduced from 50% to 18% in a USD 61 billion market, with 0% duty access for diamonds, platinum and coins covering USD 29 billion. This strengthens India’s leadership in both natural and lab-grown diamonds and precious metals.

Home Décor

Tariffs reduced from 50% to 18% in a USD 52 billion market, with 0% duty for select items worth USD 13 billion, including chandeliers and illuminated signs.

Toys

Tariffs reduced from 50% to 18% in a USD 18 billion market, creating strong opportunities for MSMEs to scale production and integrate into global supply chains.

Machinery and Parts (Excluding Aircraft Parts)

Tariffs reduced from 50% to 18% in a USD 477 billion market. India’s current exports of USD 2.35 billion are expected to grow significantly, supporting India’s manufacturing ambitions.

Agriculture: Growth with Strong Safeguards

India maintains a USD 1.3 billion agricultural trade surplus with the U.S.

Zero Duty Access

The U.S. will apply zero additional duty on USD 1.36 billion of Indian agricultural exports, including spices, tea, coffee, nuts, fruits, cereals, bakery products, cocoa, seeds, and processed foods. Within this, USD 1.035 billion is assured zero reciprocal tariff.

Calibrated Market Opening

Highly sensitive sectors—meat, poultry, dairy, GM foods, cereals, millets, pulses, oilseeds, honey, ethanol, tobacco and more—remain fully protected. Tariff rate quotas, phased elimination, and tariff reduction mechanisms ensure measured liberalisation without disrupting domestic farmers.

Zero-Duty Access for USD 38 Billion in Industrial Exports

Zero additional duty applies to aircraft parts, machinery, pharmaceuticals, auto parts, gems, chemicals, instruments, paper, plastics, wood products, and natural rubber, strengthening India’s industrial export base.

Digital Trade, Technology and Innovation

The agreement strengthens India’s digital backbone through access to semiconductors, AI chips, server components and data-centre infrastructure. Streamlined licensing improves transparency and efficiency while preserving national security safeguards.

India ranks 5th globally in digitally delivered services exports, with exports of USD 0.28 trillion in 2024, growing at 10.3%. A structured digital trade framework with the U.S.—the world’s largest importer—reduces compliance friction, boosts SME participation, and encourages investment in AI, cloud, fintech and health-tech.

Health, Consumers and Value Chains

Improved access to advanced medical devices supports healthcare affordability and infrastructure. Consumer welfare is enhanced through limited, structured imports that supplement domestic supply without disrupting farmers or producers.

Access to critical intermediate and high-technology inputs—ranging from specialty chemicals and APIs to semiconductor equipment and clean-energy technologies—strengthens India’s manufacturing ecosystem and global value-chain integration.

A Forward-Looking Strategic Partnership

The India–U.S. Bilateral Trade Agreement represents a transformative step in economic cooperation. By unlocking a USD 30-trillion market, securing zero-duty benefits across large product volumes, strengthening digital and technology collaboration, and safeguarding sensitive sectors, the agreement balances growth with resilience.

It positions India for sustained export-led growth, deeper global integration, stronger MSMEs, protected farmers, and long-term economic strength—a decisive leap forward in India’s global trade journey. 🇮🇳🇺🇸