India-US Seal Historic Trade Pact: Key Sectors Shielded, $40B Exports Get Boost
By State Correspondents News Desk | February 5, 2026
In a major win for Indian exporters, India and the United States have reached a framework agreement slashing tariffs on key goods, with firm safeguards for agriculture and dairy sectors. Commerce Minister Piyush Goyal assured Parliament that farmers’ interests remain untouched after a year of tough talks.
Breakthrough Terms
The deal drops US duties on Indian imports to 18% from highs of 50%, removing penalties tied to energy imports and easing barriers for competitive edge over nations like Vietnam and Bangladesh. Up to $40 billion in shipments—spanning apparel, footwear, seafood, and chemicals—now qualify for preferential access.
- Agriculture exclusions: Wheat, rice, maize, soybeans, and GM items barred from concessions.
- Dairy fully protected: No market openings for US products.
- Export winners: Textiles, leather, processed foods like juices and teas gain zero-duty potential.
Strategic Context
Stemming from PM Narendra Modi’s 2025 Washington trip, the accord aligns with Atmanirbhar Bharat goals. US Trade Rep Jamieson Greer noted cuts on American agri and industrial items, though India prioritizes balanced gains. Final paperwork nears, promising innovation and job growth.
This pact bolsters bilateral ties amid global shifts, positioning India stronger for developed nation status by 2047.
