President Donald Trump announced an India-US trade deal that will reduce tariffs on Indian exports to 18 percent from 50 percent. US duties had reached 50 percent on Indian goods and services. It included a 10 percent baseline and a 15 percent reciprocal tariff. An additional 25 percent punitive duty was imposed from August 27, 2025. The US has now lifted the 25 percent punitive duty and reduced the 25 percent reciprocal tariffs to 18 percent. This is the second biggest trade deal India has signed in 2026. Earlier, India inked a historic deal with the European Union. In fact, India has signed major deals with different countries and blocs since 2014. The Modi government has signed trade deals with Mauritius, the UAE, the UK, EFTA, Oman, and Australia, and announced a trade deal with New Zealand. In 2025, India signed a trade deal with Oman and the UK and announced the conclusion of a trade deal with NZ. The US-India deal is set to give a boost to exports compared to other Asian countries. India’s 18 percent tariff is comparatively very less than its neighbours. The US has imposed a 37 percent tariff on China, 20 percent on Bangladesh, 19 percent each on Pakistan, Malaysia, Cambodia, and Thailand. The US has imposed a 10 percent tariff on the United Kingdom. It follows the European Union, Switzerland, Japan, and South Korea, with a 15 per cent tariff. The India-US deal will push textiles and apparel, which are among the most price-sensitive segments of the country’s exports. Engineering goods comprising auto components, industrial machinery, electrical equipment, and capital goods form the largest chunk of India’s exports to the US. Tariff cut will act as a lifeline for these sectors. The trade deal will have an impact on the retail prices of major products in India. The textiles and apparel sector, including cotton garments, home textiles, and made-ups, will receive the boost. The tarrif cutt will will ease pressure on export margins of India’s gems and jewellery. Exporters in Jammu and Kashmir, too, will receive a boost from the tariff cut. Trump’s 50 percent tariff had disturbed the Valley’s handicrafts sector. For artisans whose livelihoods depend on foreign buyers, especially in niche US markets, the news had come as a sharp blow. Nearly 35 percent of our handicrafts exports go to the US. The carpet sector will be a major beneficiary of the trade deal. Kashmir carpets have almost no competition in the US market, as only Iran produces this handicraft item. Since the US has reduced tariffs, the carpet sector is set to boom again. The Jammu and Kashmir government has a responsibility to help the exporters to cash in on this opportunity and push exports to the niche US market. The government should create a conducive atmosphere so that exporters do not face logistical problems and bureaucratic red tape.
India-US trade deal
