US President Donald Trump has described Prime Minister Narendra Modi as a “great friend,” a sentiment reflected in the recent India-US trade agreement. After nearly a year of negotiations, the deal has been finalized, lowering US tariffs on Indian goods from 25% to 18%. This positions India ahead of key regional competitors like China, Pakistan, Bangladesh, and Vietnam in terms of access to the US market.
China’s tariffs remain at 34%, Indonesia faces 19%, and both Bangladesh and Vietnam are at 20%. Even Pakistan’s rate is higher at 19%, despite recent diplomatic gestures and engagement with Washington. The lower US tariffs give Indian exporters a competitive advantage across multiple sectors, especially as global supply chains are being recalibrated.
The textile sector, heavily dependent on the US market, is set to benefit significantly from the reduction, improving its competitiveness against rivals in Bangladesh, Vietnam, and China.
Prime Minister Modi welcomed the announcement, calling Trump a “dear friend” and highlighting the immediate benefits for Indian exporters. Trump emphasized that the tariff cut was made “out of friendship and respect” for Modi and took effect immediately. He also noted that India will reduce its own tariffs and non-tariff barriers on US goods.
Additionally, the White House confirmed that the previous 25% tariff on Indian imports linked to Russian oil purchases will be withdrawn, further easing trade between the two nations.
