Explainer: The India-US trade agreement

These duties are imposed over and above the existing tariffs that the Indian goods are facing in the US. 

The US has reduced the duty to 18 per cent. Prime Minister Narendra Modi has said that he was delighted that "made in India products will now have a reduced tariff of 18 per cent". 

GAINS FOR INDIA: Labour-intensive sectors such as garments, leather and non-leather footwear, gems and jewellery, carpets and handicrafts may get a boost as high tariffs were hurting exports of these goods to the US.

BILATERAL TRADE: During 2021-25, the US was India's largest trading partner in goods. The US accounts for about 18 per cent of India's total exports, 6.22 per cent in imports, and 10.73 per cent in bilateral trade. In 2024-25, the bilateral trade touched USD 186 billion (USD 86.5 billion exports and USD 45.3 billion imports). With America, India had a trade surplus (the difference between imports and exports) of USD 41 billion in 2024-25. It was USD 35.32 billion in 2023-24 and USD 27.7 billion in 2022-23. In services, India exported an estimated USD 28.7 billion and imported USD 25.5 billion, adding a USD 3.2 billion surplus. Altogether, India ran a total trade surplus of about USD 44.4 billion with the US.

MAJOR PRODUCTS TRADED BETWEEN THE TWO: In 2024, India's main exports to the US included drug formulations and biologicals (USD 8.1 billion), telecom instruments (USD 6.5 billion), precious and semi-precious stones (USD 5.3 billion), petroleum products (USD 4.1 billion), vehicle and auto components (USD 2.8 billion), gold and other precious metal jewellery (USD 3.2 billion), ready-made garments of cotton, including accessories (USD 2.8 billion), and products of iron and steel (USD 2.7 billion). Imports included crude oil (USD 4.5 billion), petroleum products (USD 3.6 billion), coal, coke (USD 3.4 billion), cut and polished diamonds (USD 2.6 billion), electric machinery (USD 1.4 billion), aircraft, spacecraft and parts (USD 1.3 billion), and gold (USD 1.3 billion).

SERVICES TRADE: As per estimates, USA's services imports from India amounted to USD 40.6 billion in calendar year 2024, with computer/information services imports at USD 16.7 billion and business management/consulting at USD 7.5 billion. 

HIGH TARIFFS IN US: As per reports, the US imposes high duties on items like dairy products (188 per cent), Fruits and vegetables (132 per cent), Coffee, tea, cocoa and spices (53 per cent), Cereals and food preparations (193 per cent), Oilseeds, fats and oils (164 per cent), beverages and tobacco (150 per cent), Minerals and metals (187 per cent), and Chemicals (56 per cent). -- PTI