Addressing the Lok Sabha on Wednesday, Goyal described the milestone pact as a “tremendous achievement” for India, asserting that its sensitive domestic sectors have been shielded from adverse impacts. He credited Prime Minister Narendra Modi’s leadership and diplomacy for securing a deal that protects farmers and dairy producers even as it expands trade with the world’s largest economy.
Key Outcomes: Tariff Reductions and Sector Safeguards
At the heart of the agreement is a significant reduction in U.S. import tariffs on Indian goods. After months of tariff tensions that saw duties climb as high as 50% on certain Indian products, Washington agreed to cut reciprocal tariffs down to around 18%, a move expected to restore competitiveness for Indian exports across key sectors that had been hit hard in recent months.Government officials have stressed that this restructuring does not erode protective measures for sectors like rice, dairy, milk products, and other sensitive agricultural commodities - a point that Goyal reiterated multiple times in Parliament.
What This Means for India’s Industries
Export-dependent industries, particularly handicrafts, textiles, gems and jewellery, and engineering goods, are poised for a rebound. Tariff relief in the U.S. market is expected to lower costs for American buyers, thereby boosting demand for “Made in India” products and helping companies regain lost market share.This development also comes after a period of economic friction between India and the U.S., when high tariffs imposed in 2025 threatened Indian exporters and market sentiment.
Political Pushback and Broader Context
While ruling party members have lauded the pact as a strategic win, the political opposition has raised concerns about long-term consequences, particularly with respect to agriculture and energy policies. Debate inside the Lok Sabha at times grew heated, underscoring the sensitive nature of international trade negotiations.Nevertheless, the Indian government has maintained that the pact is not only commercially sound but also future-focused, positioning Indian businesses for deeper integration into global supply chains.