Tariff cuts, wider market access and job creation to boost MSMEs, farmers and women entrepreneurs
New Delhi: India and the United States have agreed on a framework for an Interim Trade Agreement, marking a major step forward in bilateral economic cooperation and opening significant opportunities for Indian exporters. Finalised under the leadership of Prime Minister Narendra Modi and US President Donald Trump, the pact is expected to accelerate trade, generate large-scale employment, and strengthen India’s manufacturing ecosystem.
The agreement grants Indian businesses access to the vast $30 trillion US market, offering major gains for MSMEs, farmers, fishermen, startups, and women entrepreneurs. In a key reform, the United States will reduce reciprocal tariffs on Indian goods to 18 %, enhancing competitiveness across textiles and apparel, leather and footwear, plastics and rubber, organic chemicals, home décor, handicrafts, and machinery. Tariffs will also drop to zero on high-value exports such as generic pharmaceuticals, gems and diamonds, and aircraft parts.
India will benefit from exemptions and tariff-rate quotas for auto components and pharmaceuticals, while sensitive agricultural and dairy products remain fully protected to safeguard farmers’ livelihoods.
On February 7, Prime Minister Modi called the development “great news for India and the USA,” saying the framework would strengthen the ‘Make in India’ initiative by creating fresh opportunities for farmers, entrepreneurs, and innovators while generating large-scale employment for women and youth. He thanked President Trump for his personal commitment to stronger ties, noting the pact reflects the growing depth, trust, and dynamism of the partnership.
Beyond tariffs, both nations will ease non-tariff barriers, deepen technology cooperation, and strengthen resilient supply chains, positioning the agreement as a steppingstone toward a comprehensive trade deal and sustained economic growth.
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