India, U.S. businesses hail India-U.S. deal; tariff cut to 18% boosts trade prospects
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Indian and U.S. businesses are celebrating U.S. President Donald Trump’s decision to cut tariffs on Indian goods from 50% to 18% and the announcement of a much-anticipated India–U.S. Trade Deal that lowers tariffs on U.S. exports to India.
While the details of the trade agreement are not yet known, both Prime Minister Narendra Modi and President Trump have acknowledged the reduction in the unilateral tariffs the US had recently imposed on Indian exports.
In a statement, U.S. Chamber of Commerce President and CEO Suzanne P. Clark welcomed progress toward a trade deal between the US and India. “We congratulate the U.S. and Indian governments on their announcement to reduce tariffs and non-tariff barriers that will benefit American and Indian companies and workers in both great nations. We appreciate the efforts of President Trump and Prime Minister Modi, and their officials, including Ambassadors Kwatra and Gor. We are optimistic that this is the first step toward a comprehensive trade agreement that will unlock even more private sector collaboration, and we look forward to reviewing the details of the deal,” she said.
“The Chamber, our U.S.-India Business Council, and our members are strong champions of this effort, and we look forward to partnering with both governments to implement today’s announcement,” she added.
Meanwhile, the Federation of Indian Export Organisations (FIEO) termed the India–US Trade Deal the ‘Father of All Deals’, being finalised close on the heels of the India–EU FTA, which has been called the ‘Mother of All Deals’. “The finalisation of the India–US Trade Deal and the reduction of US tariffs to 18 percent on Indian-made products is a landmark achievement. It reflects the growing strategic and economic partnership between India and the United States and opens up vast opportunities for Indian exporters, particularly MSMEs,” S C Ralhan, President, FIEO, said.
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India’s key export-oriented sectors such as engineering goods, textiles and apparel, pharmaceuticals, chemicals, leather products, gems and jewellery, and agricultural products are expected to gain significantly from the tariff rationalisation.
“Lower tariffs will not only improve price competitiveness but also help Indian exporters integrate more deeply into US supply chains. This agreement will encourage capacity expansion, attract fresh investments, and support job creation in export-oriented industries,” Ralhan said.
The reduction in reciprocal tariffs from 50% to 18% is seen as a major game-changer for the competitiveness of Indian exports vis-à-vis other Asian suppliers. FIEO expects this to lead to an immediate and substantial release of orders that were earlier put on hold, particularly in labour-intensive sectors such as apparel, textiles, leather, and footwear, where global buyers typically lock in summer-season sourcing by December. With sharper price parity, improved tariff certainty, and strong buyer confidence in Indian suppliers, these sectors are poised for a rapid surge in orders and a strong acceleration in export growth in the coming months, the organisation stated.