New Delhi: Finance Minister Nirmala Sitharaman has described the new trade understanding with the United States as highly encouraging for India, saying the decision to reduce tariffs on Indian goods to 18 percent will give a strong push to exports and help domestic industries regain lost ground.
Speaking on Tuesday, the minister expressed confidence that lower duties would revive demand for Indian products in the American market. She said exporters who had struggled under the earlier high tariff regime would now find better opportunities, while also continuing to benefit from alternative markets developed over the past year.
The earlier levy of 50 percent had sharply affected shipments from India by increasing costs for American buyers and reducing profit margins for manufacturers. Key sectors such as steel, aluminium, textiles, engineering goods and certain agricultural products witnessed a decline in orders as importers shifted to suppliers from other countries.
Under the new arrangement announced by US President Donald Trump, tariffs on Indian goods will be aligned with the levels faced by most Asian economies, which range between 15 and 19 percent. The finance minister noted that detailed terms of the agreement would be released soon, but the broad framework was clearly favourable for Indian businesses.
Economic analysts have pointed out that the punitive duties imposed last year had led to a noticeable fall in India’s trade surplus with the United States and contributed to weak investor sentiment. Several labour intensive industries, including apparel, footwear and jewellery, were among the worst affected as they compete primarily on price.
The revised tariff structure is expected to restore India’s advantage over regional competitors such as Vietnam and Bangladesh, which currently face higher duties. Industry bodies believe the change will help manufacturers recover orders, increase production and protect employment in export oriented clusters.
The government views the development as part of a larger effort to deepen economic engagement with the United States. Officials said the improved access would complement India’s strategy of expanding manufacturing under the Made in India initiative and strengthening integration with global supply chains.
Sitharaman emphasised that the tariff relief would work together with new markets discovered during the difficult period, creating a broader base for growth. According to her, the shift marks an important turning point that could help Indian exports regain momentum in the months ahead.
