India and the United States have announced an interim trade agreement that is expected to significantly boost bilateral trade, reduce tariffs and generate lakhs of jobs in India. Union Minister of Commerce and Industry Piyush Goyal said the framework pact, unveiled on Saturday, would open up a USD 30 trillion market for Indian exporters after months of negotiations between the two countries.

The agreement marks a key milestone in India US trade talks, with negotiations held in both New Delhi and Washington. Under the framework, the US will reduce reciprocal tariffs on Indian goods to 18 per cent, while eliminating duties on several major export categories.

Tariff Reductions To Expand Export Opportunities

Explaining the details of the pact, Goyal said the tariff cuts would create new opportunities across a wide range of sectors. Indian exporters in textiles and apparel, leather and footwear, plastic and rubber products, organic chemicals, home décor items, artisanal goods and select machinery segments are expected to benefit from improved access to the US market.

In addition, import duties will be reduced to zero on products such as generic pharmaceuticals, gems and diamonds, and aircraft parts. Officials said this would enhance India’s export competitiveness, particularly in sectors where Indian manufacturers already enjoy strong global demand.

The commerce ministry believes that the tariff relief will particularly benefit micro, small and medium enterprises, which form the backbone of India’s export ecosystem.

Jobs And Market Access In Focus

Calling the agreement a major achievement, Goyal said the deal would help Indian businesses tap into the world’s largest economy and create large scale employment. In a social media post, he credited the outcome to the leadership of Prime Minister Narendra Modi and said the benefits would extend to MSMEs, farmers and fishermen.

According to the government, increased exports and expanded manufacturing activity could lead to the creation of lakhs of new jobs, especially for women and youth. Labour intensive sectors are expected to see faster gains, while manufacturing and high value exports may drive sustained employment growth over time.

Farmers’ Interests Remain Protected

The government has stressed that the agreement does not compromise India’s agricultural interests. Goyal said sensitive farm and dairy products have been fully protected to safeguard rural livelihoods.

Items such as maize, wheat, rice, soya, poultry, milk, cheese, ethanol used as fuel, tobacco, certain vegetables and meat have been excluded from tariff concessions. Officials said this ensures that Indian farmers are shielded from potential import pressures.

The interim agreement is expected to pave the way for a broader and more comprehensive trade deal between India and the US, with further discussions likely in the coming months.

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