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US-India Trade Breakthrough: Tariffs Slashed to 18% in "Win-Win" Deal

The United States and India have announced a framework for an interim trade agreement, effectively ending a protectionist standoff by capping reciprocal tariffs at 18%. The deal sees India eliminating or reducing tariffs on a wide range of US industrial and agricultural goods. In return, the US will apply an 18% tariff on Indian textiles, apparel, leather, and other goods, with plans to later remove tariffs on items like pharmaceuticals and aircraft parts. Odisha BJP Vice President Dr Jatin Mohanty hailed the pact as a testament to India's strong economic stance and a mutual benefit for both nations.

Key Points: US-India Interim Trade Agreement Cuts Tariffs to 18%

  • Tariffs reduced to 18%
  • Ends high-stakes trade standoff
  • India to buy $500B US goods
  • Covers industrial, agricultural products
  • Framework for broader trade deal
3 min read

"Mutual agreement that benefits both countries": Odisha State BJP VP Jatin Mohanty on US-India interim trade agreement

Odisha BJP VP hails US-India trade pact as a mutual win, with tariffs reduced to 18% on key goods after years of negotiation.

"This is a mutual agreement that benefits both countries. - Dr Jatin Mohanty"

Bhubaneswar, February 8

Odisha state BJP Vice President Dr Jatin Mohanty on Sunday welcomed the India-US interim trade agreement, calling it a win-win for both countries and a victory for India's growing economic leverage.

Speaking with ANI, he framed the development not just as a policy shift, but as a testament to India's "strong stance" on the global stage. According to Mohanty, the U.S. "had to back down" after realising that India's massive economy is too vital to ignore or isolate. A mutual agreement was reached to stabilise trade, with tariffs reduced to 18%.

"The India-US trade agreement had been under discussion for a few years. Due to issues, the U.S. president announced an increase in tariffs... But later, following discussions and the government's strong stance, the American government had to back down. They realised that they could not ignore such a large economy... Yesterday's announcement stated that tariffs have been reduced to 18%... This is a mutual agreement that benefits both countries," said Mohanty.

The agreement, capped at 18%, marks the end of a high-stakes standoff that had previously seen the US implement aggressive protectionist measures.

The United States and India announced a framework for an Interim Agreement on reciprocal, mutually beneficial trade, reaffirming their commitment to a broader Bilateral Trade Agreement (BTA) launched by President Donald Trump and Prime Minister Narendra Modi on February 13, 2025.

As part of the framework, India has agreed to eliminate or reduce tariffs on all US industrial goods and a wide range of US agricultural and food products, including dried distillers' grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products.

On the other hand, the United States will impose a reciprocal tariff of 18 per cent on goods originating in India, including textiles and apparel, leather and footwear, plastic and rubber products, organic chemicals, home decor, artisanal goods and certain machinery. Subject to the successful conclusion of the Interim Agreement, the US has said it will later remove reciprocal tariffs on select items, including generic pharmaceuticals, gems and diamonds, and aircraft parts.

The United States will also remove tariffs on certain aircraft and aircraft parts from India, which were imposed to address national security threats, the joint statement said.

According to the statement, India will eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products, including dried distillers' grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products.

India also intends to purchase USD 500 billion of US energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal over the next five years.

- ANI

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Reader Comments

P
Priya S
Hope this benefits our farmers and small industries. The agreement mentions a lot of US agricultural imports. We must ensure our local farmers are protected and not undercut by cheaper imports.
V
Vikram M
A $500 billion purchase commitment over 5 years? That's a huge number. While strategic, I hope we are getting the best possible deal on energy and aircraft parts. The details matter more than the headline.
S
Sarah B
As someone working in the textile sector, the 18% reciprocal tariff on our apparel is a concern. We compete with Bangladesh and Vietnam who often have better trade terms. Hope the promised removal on select items like pharmaceuticals happens soon.
R
Rohit P
Good diplomacy by the government. The US had to come to the table because of our market size. This is how you negotiate from a position of strength. Jai Hind!
K
Karthik V
While the political spin is about "making America back down," we should focus on the substance. Reducing tariffs on US industrial goods must be matched by genuine market access for our products like leather and chemicals. Let's see the fine print.
N
Nisha Z
Wine and spirits? Really? We have so many pressing needs. I understand it's a package deal, but hope the focus remains on technology transfer and critical machinery that helps build our manufacturing base

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