India–US deal key to expanding strategic sectors, boosting exports: Goyal

New Delhi: The trade agreement with the US will help India position itself more strongly globally, as the country needs to expand capabilities across a range of sectors, including energy, aviation, data centres, critical minerals, and nuclear energy.

In a statement in the Lok Sabha on Wednesday, Union commerce and industry minister Piyush Goyal said the US is a global leader in many of these areas, and engagement with Washington would not only help India meet its procurement needs but also create fresh opportunities for Indian exports.

Goyal said that India’s approach to the India–US trade talks has been guided by a long-term strategy of diversifying sources of supply in line with changing international strategic conditions. All actions taken by India, he said, were aligned with this objective, and urged members to view the agreement in a comprehensive manner, rather than focusing narrowly on individual sectors or tariff lines.

The minister said that the government’s assessment showed that India’s exports to the US were already significant across several sectors and were expected to grow further as economic engagement deepens.

He described the understanding with Washington as a structural, long-term arrangement with the world’s largest economy that could support global growth and innovation in the years ahead.

His statement came a day after the government clarified that the interests of farmers, the dairy sector and agriculture had been protected in the trade talks, amid questions raised in Parliament over the impact of the agreement on sensitive domestic sectors.

Goyal told the Lower House that just as India had safeguarded its sensitive sectors during the negotiations, the United States had also shielded some of its sensitive areas, indicating a balanced outcome.

India and the US have stepped up economic engagement at a time when global supply chains are being reshaped, with governments seeking to reduce vulnerabilities and strengthen cooperation in strategic sectors.

The government views the trade agreement as part of a broader effort to enhance India’s global economic standing, expand exports and reinforce the goals of a developed India and an Aatmanirbhar Bharat (self-reliant India), Goyal said, adding that the government would continue to work towards realising this vision through deeper global partnerships.

Following Prime Minister Narendra Modi’s visit to Washington on 13 February, India and the US have been engaging closely for nearly a year to arrive at a balanced and mutually beneficial trade agreement, Goyal said. “Negotiators from both sides held several rounds of intensive and high-level discussions aimed at addressing market access concerns while safeguarding sensitive domestic interests.”

During the talks, Indian negotiators ensured that all important and sensitive sectors were protected, with particular emphasis on agriculture and dairy. The government has maintained that the interests of farmers and allied sectors were fully safeguarded in the negotiations. The US side, he said, also acknowledged that there were certain sensitive sectors on the American side that were ring-fenced during the talks, underscoring that the agreement involved mutual accommodations.

On 2 February 2026, PM Modi and US President Donald Trump discussed the agreement and its broader bilateral and international implications during a phone call, following which Trump announced a sharp reduction in tariffs on Indian goods to 18% from the earlier 50%, he said.

The government has argued that the revised tariff level places Indian products in a more competitive position compared with other major exporting nations, which are subject to higher US duties, and is expected to boost demand for Indian goods in the American market.

Competitive position

According to data released by the White House, the revised US tariff structure places India in a relatively competitive position compared with several other major exporting nations. India faces an 18% tariff, which is lower than rates imposed on key competitors such as Bangladesh and Vietnam, both of which face tariffs of 20%. China continues to face a significantly higher tariff of 37%, while Brazil is subject to duties as high as 50%.

Among other major exporters, the European Union, Japan, South Korea and Switzerland face tariffs of around 15%, while countries such as Malaysia, Cambodia and Thailand are subject to duties of 19%. South Africa faces a 30% tariff, while Myanmar and Laos face rates of 40%.

“The relatively lower tariff on Indian goods compared with competing manufacturing hubs, particularly in labour-intensive sectors such as textiles and seafood, would improve India’s price competitiveness in the US market and support higher demand for Indian exports,” said Goyal.

“The reduction of US tariffs on Indian goods to 18% materially improves India’s export competitiveness, especially in labour-intensive sectors such as textiles, apparel, leather and seafood,” said Abhash Kumar, a trade economist, adding that the tariff reset comes at a time when global buyers are actively looking to diversify supply chains away from high-tariff and high-risk locations.

“When key competitors like Bangladesh and Vietnam face higher duties, even a two-percentage-point advantage can translate into meaningful order diversion towards India in the US market.”

Exports to the US rose month-on-month in December, indicating that demand held up despite higher tariffs, even as exporters faced pricing and margin pressures. Exports in December rose to $7.01 billion from $6.98 billion in November, despite stiff tariffs.

Shipments in the first nine months of the current fiscal year (April–December) also rose about 10% to $65.88 billion. Bilateral goods trade between India and the US stood at $105.31 billion during April–December, with India recording a trade surplus of $26.45 billion.

This compares with bilateral trade of $94.97 billion in the corresponding period of the previous fiscal year, when the trade surplus stood at $25.09 billion.