The India-US Bilateral Trade Agreement (BTA) marks a major milestone in India’s global trade engagement, securing sustained preferential access for exports in the US market valued at over $30 trillion, according to an official statement issued on Monday.

The agreement delivers comprehensive tariff rationalisation, zero-duty access across large product categories, enhanced digital and technology cooperation, and a carefully calibrated framework to safeguard India’s farmers, MSMEs and domestic industry.

With India’s total exports to the United States standing at $86.35 billion in 2024, the agreement significantly enhances competitive access across key sectors including textiles, leather, gems and jewellery, agriculture, machinery, home decor, pharmaceuticals and technology-driven industries.

Under the agreement, tariffs on $30.94 billion worth of these exports have been reduced from 50 per cent to 18 per cent, while tariffs on another $10.03 billion have been reduced from 50 per cent to zero. This means a substantial share of Indian goods entering the US market will now face either sharply lower tariffs or completely duty-free access, significantly improving price competitiveness.

India’s labour-intensive textiles and apparel exports gain tariff cuts from 50 per cent to 18 per cent, with silk securing zero per cent duty access in a $113 billion US market for the these goods while machinery exports see tariffs reduced to 18 per cent, opening opportunities in a $477 billion US market, the statement explained.

The agreement delivers significant gains for India’s leather and footwear sector, positioning the country as most-preferred supplier to the US market. Tariffs on exports from India have been reduced from 50 per cent to 18 per cent, providing improved access to a US market valued at $42 billion.

Given the labour-intensive nature of the leather and footwear industry, enhanced market access is expected to support manufacturing growth and employment generation, particularly across MSMEs and production clusters.

Similarly, tariffs on gems and jewellery exports have been reduced from 50 per cent to 18 per cent, providing preferential access to a US market valued at $61 billion. In addition, zero duty market access has been secured for major product categories including diamonds, platinum and coins, covering a US market of $29 billion.

In another major gain, Indian agricultural exports worth $1.36 billion have got zero additional US duty access while key products including spices, tea, coffee, fruits, nuts and processed foods gain zero-duty treatment

Highly sensitive sectors such as dairy, meat, poultry and cereals remain fully protected under the India-US trade deal, the statement further explained.

The agreement creates a clear tariff differential in favour of India. While duties on Indian products have been lowered, several competing suppliers continue to face elevated tariffs in the US market, including China (35 per cent), Vietnam (20 per cent), Bangladesh (20 per cent), Malaysia (19 per cent), Indonesia (19 per cent), Philippines (19 per cent), Cambodia (19 per cent) and Thailand (19 per cent), the statement added.