India-US trade deal: What it means for farmers, entrepreneurs and the ‘Make in India’ push

India-US trade deal: The newly announced trade agreement between India and the United States is expected to strengthen the ‘Make in India’ initiative by creating new opportunities for new youth and businesses. In a joint statement issued on Saturday, the two nations revealed the details of the pact, which will cut tariffs on Indian goods entering the US from 50% to 18%, significantly widening access for exporters to the American market.

PM Narendra Modi hailed the deal, calling it an important move to deepen economic engagement, strengthen manufacturing at home and expand employment opportunities. In a post on X, PM Modi said, "Great news for India and USA! We have agreed on a framework for an Interim Trade Agreement between our two great nations." He further added that the "framework reflects the growing depth, trust and dynamism of our partnership."

Boost for 'Make in India'

PM Modi said that the deal "strengthens ‘Make in India’ by opening new opportunities for India’s hardworking farmers, entrepreneurs, MSMEs, StartUp innovators, fishermen and more. It will generate large-scale employment for women and youngsters.”

Also read | What agriculture sector gains from India-US trade deal

Under the deal, the United States will impose 18% tariffs on goods originating from India. The levy will apply across sectors such as textiles and apparel, leather and footwear, plastic and rubber items, organic chemicals, home decor, artisanal products and certain machinery. Furthermore, the agreement also states the withdrawal of reciprocal tariffs on a broad list of products once the interim agreement is successfully concluded, including generic pharmaceuticals, gems and diamonds and aircraft parts.

Indian goods are also set to benefit from a preferential tariff rate quota for automotive components, in line with American national security requirements under the existing proclamation governing such imports. Beyond that, tariffs dropping to zero on products such as generic medicines, precious stones and aircraft parts are projected to further widen exports and strengthen domestic production ecosystems.

"Additionally, tariffs will go down to zero on a wide range of goods, including generic pharmaceuticals, gems & diamonds, and aircraft parts, thereby further enhancing India’s export competitiveness and Make in India."

The package includes additional advantages: exemptions under Section 232 for aircraft parts, a tariff rate quota for auto parts and negotiated outcomes for generic pharmaceuticals. Together, these are expected to deliver concrete gains for exporters operating in these sectors.

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Commerce and industry minister Piyush Goyal said the deal would give Indian exporters access to a $30 trillion market, particularly benefiting MSMEs, farmers and fishermen. He added that higher exports would create lakhs of new job opportunities for women and young people. "This agreement will help India and the US remain focused on working together to further deepen economic cooperation, reflecting shared commitment to sustainable growth for our people and businesses," he further added.

As the market access is expanding, New Delhi has also stressed that core agricultural and dairy interests remain shielded. Sensitive items, maize, wheat, rice, soya, poultry, milk, cheese, ethanol (fuel), tobacco, certain vegetables and meat, will be completely protected, a move aimed at sustaining rural incomes and livelihoods.