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US Slashes Tariffs to 18%, Boosting India Trade and Textile Sector

Experts have welcomed the US decision to reduce tariffs on Indian imports to 18%, calling it a significant move to strengthen bilateral trade. The textile industry, in particular, has described the rollback from a punitive 50% as a major relief and a "lifeline." The new rate is currently the lowest among competing export nations, restoring India's global competitiveness. While positive, economists note that dairy and certain agricultural products are excluded from the arrangement and monitoring goods quality will be important.

Key Points: US Cuts Tariffs to 18%: Major Boost for India Trade & Textiles

  • US tariff cut from 50% to 18%
  • Major relief for textile industry
  • Expected boost to bilateral trade
  • India's global competitiveness restored
  • Dairy, agri products kept out of deal
2 min read

US tariff cut to 18 pc big boost for India trade and textile sector: Experts

US reduces tariffs on Indian imports to 18%, providing major relief to the textile sector and strengthening bilateral trade, say experts.

"a 'lifeline' for the sector - Selvaraj, SIMA"

New Delhi, Feb 4

Experts on Wednesday welcomed the United States' decision to reduce tariffs on Indian imports and exports to 18 per cent, saying the move will strengthen bilateral trade and provide major relief to the textile industry.

Speaking to IANS, agricultural economist Dr R.S. Ghuman said that under the World Trade Organisation (WTO) framework, such high tariffs should ideally not be imposed, as they restrict the potential of bilateral trade.

"With tariffs now reduced to 18 per cent, the decision is expected to significantly benefit import and export activities between the two countries," he said.

"This step will give fresh momentum to trade and boost overall business activity," Ghuman told IANS.

Dr Ghuman added that while the move is positive, it will be important to monitor the quality of goods being traded in the future.

He pointed out that dairy and certain agricultural products have been kept out of the current arrangement.

"India is a global leader in rice exports, which is closely linked to the Minimum Support Price (MSP) system," he highlighted.

"In this context, the decision could also have implications within the broader global trade framework," he said.

However, even with the current focus on bilateral trade, India stands to gain considerably from the tariff reduction, according to him.

Meanwhile, the textile industry has described the US decision as a major relief. Selvaraj, Secretary General of the Southern India Mills' Association (SIMA), called the rollback of the earlier 50 per cent punitive tariff to 18 per cent a "lifeline" for the sector.

Selvaraj expressed gratitude to the Prime Minister and the Union Ministers for Commerce and Textiles for their diplomatic efforts, which helped negotiate the reduced 18 per cent tariff rate.

"The new rate is currently the lowest among competing export nations, restoring India's global competitiveness," he told IANS.

He also noted that recent trade agreements with the UK and Europe, along with supportive measures announced in the Union Budget 2026-27, have strengthened the industry's confidence.

- IANS

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Reader Comments

R
Rohit P
Good step, but Dr. Ghuman makes a valid point about monitoring quality. We must ensure 'Made in India' stands for top-notch products, not just cheaper ones. Long-term reputation matters more than short-term gains.
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Aman W
My family runs a small garment unit. This news is a huge sigh of relief. The punitive tariffs were killing us. Hope the benefits actually trickle down to MSMEs and aren't just captured by big players.
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Sarah B
Interesting to see dairy kept out. Understandable from a US perspective, but hope future talks can include more agri-products. Stronger trade ties between democracies are good for global stability.
K
Karthik V
"Lowest among competing nations" - that's the key phrase! This can really boost our forex reserves. Combined with the UK/EU deals, India is finally getting its trade policy right. More power to our weavers and artisans!
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Varun X
While welcoming this, we must be cautious. The US often links trade with other demands. We must protect our strategic interests and MSP system for farmers, as mentioned for rice. Can't compromise on food security.

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