3. India–US Trade Deal and Reduction of Tariffs

Background India and the United States concluded a trade agreement aimed at deepening economic engagement amid global supply chain realignments. Key Provisions • The US reduced tariffs on Indian goods from 50% to 18%. • Enhanced market access for Indian exports, especially labour-intensive sectors such as apparel and gems & jewellery. • India retained protective measures for agriculture and dairy sectors, safeguarding farmers’ interests. • Strengthens the strategic economic partnership between the two countries. Value Addition • Supports Make in India, MSMEs, and export-led growth. • Aids China+1 supply chain diversification strategy. • Reflects a shift from protectionism to strategic trade diplomacy. Constitutional & Legal Framework • Article 246: Trade and commerce under the Union List. • Guided by WTO principles and bilateral trade norms. Conclusion The deal represents a mutually beneficial recalibration of trade ties, balancing domestic sensitivities with global competitiveness. UPSC Relevance: GS Paper II & III – International relations, external trade