India’s exports to the United States are set for a rebound after Washington agreed to slash tariffs on Indian goods from 50% to 18%, Finance Minister Nirmala Sitharaman said on Tuesday. Calling the move “a good augury” for exporters, she said the tariff relief would help Indian products regain competitiveness in the crucial American market.
Speaking to PTI, Sitharaman noted that the steep duties imposed last year had pushed up landed costs for Indian goods in the US, hurting margins and forcing buyers to shift orders to alternative suppliers. Sectors such as steel, aluminium, textiles, engineering goods and select agricultural products were among the worst hit. With tariffs now lowered, exporters are expected to see improved order flows, she said, adding that many firms had also diversified into new markets during the period of high duties.
The tariff reduction is part of a broader understanding between India and the US. Under the arrangement, India is expected to lower trade barriers and rework parts of its import strategy, while the US brings duties on Indian goods closer to levels faced by other Asian exporters, typically in the 15–19% range. The 18% levy also undercuts tariffs faced by key competitors such as Vietnam and Bangladesh, restoring India’s price advantage for labour-intensive exports like apparel, footwear and jewellery.
Analysts say the earlier punitive tariffs had weighed on bilateral trade and investor sentiment, with India’s trade surplus with the US narrowing in late 2025 and foreign portfolio outflows rising amid uncertainty. The new rate is expected to ease pressure on exporters and revive shipments over the coming quarters.
While the detailed terms of the agreement are yet to be formally announced, Sitharaman said the tariff cut alone sends a positive signal to global buyers. “Exports should pick up now,” she said, expressing confidence that Indian manufacturers will be able to claw back lost ground in the US market as the deal comes into force.
