About the Trade Agreement

• US reciprocal tariffs on Made in India products will now be reduced from 25% to 18% effective immediately. US has also withdrawn the additional 25% duty.
  • In August 2025, the US imposed a tariff of up to 50% comprising a 25% reciprocal tariff plus an additional 25% duty over Russian oil imports.
• As reported by the US, India has agreed to scale up imports of American goods, including over $500 billion worth of energy, technology products, and nuclear equipment.
  • India will progressively reduce its Tariffs and Non-Tariff Barriers against the US.

Significance of the deal

• Economic Significance: Provides increased opportunities for farmers, MSMEs, entrepreneurs, and skilled workers to Make, Design and Innovate in India for the world. 
  • It will help India get technology from the US.
• Strategic Reset in Bilateral Relations: The deal ends a phase of tariff-led escalations and upholds momentum and trust in India–US strategic and economic engagement.
• Geopolitical implications: It strengthens India’s position in the global supply chain, potentially countering China’s dominant position in global trade and manufacturing.
• Macroeconomic Stability: The deal potentially helps stabilise capital flows, supports the rupee, and improves investor confidence amid global uncertainty.