India-US Trade Deal Live: Modi Says Patience Has Paid Off, World Order Shifting In Our Favour

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"The US–India trade deal reflects strong leadership by Prime Minister Shri @narendramodi ji and President @realDonaldTrump, opening markets, strengthening supply chains, and creating new opportunities for businesses and workers in both countries. It is a win-win for the world’s two largest democracies. With the reduction in tariffs from 25% to 18%, many manufacturing sectors in India will be at an advantage. Make in India products in textiles, garments, auto parts, chemicals, seafood, and gems and jewellery will gain better competitiveness in US markets. The deal also envisages technology transfer in the longer run, which will give Indian manufacturers better opportunities to improve their capacity and product range.", says Union Civil Aviation Minister Ram Mohan Naidu Kinjarapu.

Department of Economic Affairs Secretary Anuradha Thakur says that they are waiting for the details of the US trade deal. "Let's see what impact it will have", she added, saying that the "deal is a result of constructive dialogue."

US Secretary of Agriculture Brooke Rollins said on Tuesday that the new India–U.S. trade agreement would expand opportunities for American agricultural exports, bringing economic gains to rural communities. In a post on X, she thanked President Donald Trump for “once again delivering for American farmers,” noting that the deal would open access to India’s vast consumer market, raise commodity prices, and bring more income into farming regions.

Rollins also highlighted that the US had a $1.3 billion agricultural trade deficit with India in 2024, and emphasized that India’s growing population represents a significant potential market for U.S. farm products.

India has not yet released the full terms of the agreement. According to USDA data, US agricultural exports to India totaled around $1.7 billion in 2025, supported mainly by shipments of tree nuts, cotton, and soybean oil.

India's seafood exports to the United States are expected to recover, following months of declining shipments, after Washington agreed to cut tariffs to 18%, the Seafood Exporters Association of India (SEAI) said on Tuesday.

Fish exports to the US fell 15% by volume to 201,501 tonnes in the April-November period of the current fiscal year, while value declined 6.3% to $1.72 billion from $1.84 billion a year earlier, SEAI General Secretary K N Raghavan said, adding that he "expects that with tariffs coming down to 18%, we should get back to the previous levels."

"The US trade deal has created a positive environment. People were criticizing, but we remained patient, and that patience has paid off. Now, manufacturing should increase, and quality products should be made in the country. All MPs should be present in the House and participate in the discussions," PM Modi said at the NDA parliamentary party meeting. He added, "I had said that the world order is changing. This is evident after COVID, and today the world order is shifting in India's favor."

Read more: India-US Trade Deal Shows Patience Paid Off, Says PM Modi

"Bravo! Two of the world’s toughest negotiators come to an agreement. So, we have both the father and mother of all trade deals! Congratulations Prime Minister! India is unstoppable under your leadership!!", says Arvind Panagariya, Chairperson of the 16th Finance Commission.
 

"Today is true Diwali from a market perspective. What I feel is there was some amount of feel‑good feeling that was lacking… markets have seen very, very meaningful corrections. This is a clear market which will now become buy on decline… Everyone’s portfolio had taken a beating in the last 15 months, and something like this is a feel‑good feeling," said Madhusudan Kela, Founder of MK Ventures. 

Against the backdrop of the historic trade deal between India and US, ace investor Vijay Kedia has sung a patriotic song lauding his country. The song is now viral on social media.

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The India-US trade deal comes days after India and the European Union announced their long-delayed deal. Under the new pact, India will reduce or remove tariffs on nearly 97% of EU exports. In return, the European Union will eliminate tariffs on 99.5% of Indian goods. This will give Indian exporters wider access to the EU market. 

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Sergio Gor, 38, became the US ambassador to India just a month ago. Even in such a short time, he has quickly emerged as a key figure in reshaping US - India relations under President Trump. 

Speaking to NDTV, Gor said the deal was possible because of the strong friendship between the two nations. He said the US-India relationship has “limitless potential” and that the agreement opens a new chapter in ties between the two countries.

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• Steel, aluminium, auto parts could still face steep 25-50% US tariffs
• Steel, aluminium, copper exports from India could still face 50% tariffs despite trade deal.
• These sectors have been slapped with Section 232 duties, which are not usually waived due to a Free Trade Agreement.
• Select auto components could continue facing 25% tariffs.
• Zero tariffs for pharmaceuticals, aircraft and parts, smartphones, certain mechanical, electronic components to continue.

Leaders of the ruling National Democratic Alliance praised PM Narendra Modi for sealing to India-US trade deal that will slash tariffs on Indian goods from 50% to 18%.

The PM will address the NDA Parliamentary Party meeting in New Delhi on Tuesday morning. The Parliament's budget session is underway.

"The reduction in the US reciprocal tariff on Indian goods to 18% is a positive step that improves export competitiveness and reinforces confidence in long-term bilateral economic ties. Equally important is the intent on both sides to progressively lower tariffs and non-tariff barriers, which can deepen supply-chain integration, enable faster technology collaboration, and attract investment into advanced manufacturing," said Sudarshan Venu, Chairman, TVS Motor Co.

"India has now secured several strategic trade deals with key economic partners around the world. In a challenging global environment, predictability and openness in trade help Indian industry scale, innovate and create jobs. We look forward to a stronger India–US partnership that accelerates growth, expands market access, and supports India’s ambition to be a globally competitive manufacturing and innovation hub.”

“The Mahindra Group welcomes the India–US trade deal, which marks a significant step forward in strengthening bilateral trade and investment ties. The immediate reduction in reciprocal tariffs on Indian exports from 50% to 18%, along with the commitment to progressively lower tariff and non-tariff barriers, will boost growth momentum and improve the predictability businesses need to invest with confidence," said Anish Shah, Group CEO & Managing Director, Mahindra Group on India-US trade deal.

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Indian equity indices surged during early trade. The Nifty gained as much as 5% to just a few dozen points short of an all time high. The BSE Sensex rose 2,319 points as of 9:20 am. It had risen as much as 4,200 points to 85,871.

Markets are tracking the trade deal between India and the United States that lowers reciprocal tariffs on Indian imports to 18% from 25%. The change takes effect immediately. India had earlier faced total tariffs of 50%, including a 25% penalty linked to buying Russian oil. The US Embassy confirmed the overall tariff rate is now 18%.

The yield on the 10-year government bond fell 5 basis point at 6.71%

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With the tariff burden now lower, companies with significant exposure to the US are expected to see relief in margins, improved competitiveness, and better order visibility. Among Indian exporters, sectors such as textiles, seafood, auto ancillaries, chemicals, and select consumer companies are likely to be the key beneficiaries.

After a spell of suffering, India's trade deal with US will bring long-sought relief to the textiles and apparel sector. The sector will be the highest beneficiary for the landmark pact as US accounts for nearly 28% of India's total textile exports, making it the single largest destination for Indian textile manufacturers. Additionally, more than half of India's textile and apparel imports are linked to US cotton, highlighting the deep trade integration between the two countries.

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Indian equity markets are expected to react quite positively as the deal completely eliminates key policy uncertainties. 

Citi notes that the positive sentiment could trigger immediate foreign capital inflows, potentially turning India's Balance of Payments (BoP) position. The impact doesn't stop there. The trade deal may also go a long way in stabilising the rupee and easing pressure on domestic interest rates.

As noted by BofA, the effective tariffs will drop from approximately 35% to just 12-13%, thus providing a lifeline for labour-intensive sectors such as textiles, gems and jewellery and engineering goods, all of which have recently faced growth headwinds. 

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India-US trade deal: The rupee is set to rally sharply today and reduction on tariffs on Indian goods. Analysts at OCBC and Finrex Treasury Advisors see the currency rising about 1% on Tuesday, while Barclays predicts a “knee-jerk rally” of 1-2% after the trade deal, according to Bloomberg.

USD/INR fell 0.5% to 91.5163 on Monday.

Implied opening from forwards suggest spot may start trading around 90.14. The currency extended its gains in offshore markets after the US decision, with USD/INR 1-month non-deliverable forwards falling as much as 0.5%, extending a 1.3% overnight decline.

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BofA on Trade Deal

• India to increase its imports from US in turn by $500 billion
• Effective tariffs may drop from ~35% to ~12-13%
• Could provide India with significant relief and a competitive rate across the region, with the Russian oil penalties being removed as well.
• India will be agreeing to stop purchasing Russian crude oil, purchase more crude oil from US and Venezuela.
• Provide significant relief to India’s export sector, especially labor intensive areas such as gems & jewelry, textiles, agricultural products and engineering goods.
• See growth upside risks to India’s FY27 GDP projections of 6.8%.
• Already see reasonable growth in high frequency indicators.
• Expect GDP growth to benefit further from this trade breakthrough.
• Believe RBI is now done cutting rates but will continue to manage its liquidity provisions carefully.

Citi on Trade Deal

• Key tail risk of India’s geopolitical isolation about which investors were concerned has now been adequately addressed by the back-to-back deals with EU and US.
• Near-term growth risk from decline in labor intensive exports will now be substantially reduced as India’s tariff rates will be in line or lower than the peers in the region.
• Critical FDI (and to some extent FPI) theme of China 1 manufacturing in India might again become a dominant thesis.
• Trade deal is likely to eliminate a critical uncertainty and make policies (data center, GCC, nuclear power, mobile phone, aircraft and semicon) more effective on the ground.
• Positive sentiment effect which can bring in foreign inflows immediately could make the BoP turn positive.
• This will ameliorate the short-term pressures on the currency and rates.
• It eliminates any risk of protectionist measures to be applied on India’s large service exports to US and the people movement.
• The rub on effect of this trade deal in boosting the equity markets could provide an important catalyst to urban consumption through the wealth effect channel.
• There could be less apprehensions in the market about India’s possible tilt towards China now.

Indian equities appear poised to narrow their prolonged underperformance following a long-awaited trade agreement with the US, which has removed a major overhang on financial assets that had driven record foreign investor outflows.

Global investors have sold $3.2 billion worth of Indian equities so far this year, adding to a record $18.8 billion of outflows in 2024. After underperforming emerging-market peers by more than 30 percentage points, investor positioning weakened further in January, when India’s weight in the MSCI Emerging Markets Index slipped below South Korea’s for the first time since December 2021. This marks a sharp reversal from a period when India was challenging China for the top index position.

India’s valuation premium over the rest of Asia has also declined to its lowest level in nearly five years, as concerns over tariffs and a prolonged earnings slowdown weighed on market sentiment.

According to Jefferies Financial Group strategists, including Mahesh Nandurkar, the US trade agreement should help reverse negative foreign investor sentiment toward Indian assets. When combined with recent trade deals involving the EU, the UK, and other regions, the rupee could see a meaningful near-term boost, potentially acting as a catalyst for renewed foreign portfolio inflows.

Source: Bloomberg

INDIA-US DEAL: WORTH THE WAIT!

• India US trade deal has taken longer than expected but is on terms favourable. 
• The drop in tariffs from 50% to 18% effectively puts India on better terms than Vietnam, Bangladesh, China.
• Back to back deals with the EU and US prove 'slow and steady wins the race'.
• Deal terms not a big negative as India has been cutting down import of Russian crude for a while.
• While deal inks an 18%,some calculations set effective tariff as low as 12%.
• Obvious benefit to textiles, leather, gems and other export oriented sectors.
• Need to see: What concessions have been made on agricultural imports if any.
• Need to see: If deal eases transfer of technology in key areas.

US Chamber of Commerce President and CEO Suzanne P. Clark welcomed the India-US trade deal, saying the announcement will reduce tariffs and non-tariff barriers that will benefit American and Indian companies and workers in both great nations. 

"We are optimistic that this is the first step toward a comprehensive trade agreement that will unlock even more private sector collaboration, and we look forward to reviewing the details of the deal," she aid.

"A landmark moment for India-US relations as a historic trade deal has been finalised, bringing tariffs down to a significantly lower 18% and opening a new chapter of deeper and greater economic cooperation," said Defence Minister Rajnath Singh. 

"I congratulate Prime Minister @narendramodi and US President @realDonaldTrump on reaching this decisive agreement, which will significantly strengthen our strategic partnership and deliver tangible benefits to both the countries and their people. With this agreement, India–US economic ties are set to reach new heights," he added.

The India-US trade deal is a "good news for Made In India products" as they now face reduced tariff of 18%, said Finance Minister Nirmala Sitharaman on X. She noted that the

She thanked PM Modi and President Trump for their leadership. "People of our two large democracies stand to benefit."

India has emerged with a clear tariff advantage over several competing export economies after New Delhi and Washington announced a trade deal on February 2, lowering tariffs on Indian goods to 18%. India now faces the lowest US tariffs among all emerging markets after South Korea. The move places India below or on par with most South and Southeast Asian peers, improving its relative cost competitiveness in key global markets. 

Prime Minister Narendra Modi welcomed the announcement, calling it a boost for domestic manufacturing. "Delighted that Made in India products will now have a reduced tariff of 18%," Modi said in a post on social media platform X, thanking US President Donald Trump for the decision.

Lower Than Most Regional Peers

At 18%, India's tariff rate is now lower than several major export-oriented economies in Asia. Bangladesh, Sri Lanka, Taiwan and Vietnam face tariffs of 20%, while Indonesia, Malaysia, Thailand, the Philippines and Pakistan are levied 19%. Cambodia also faces a higher tariff burden at 19%.

Among South Asian economies, India's positioning is particularly significant. While Afghanistan faces a lower tariff of 15%, its limited manufacturing depth and small export base mean it is not a meaningful competitor. Pakistan, India's closest rival in textiles and select manufacturing segments, faces a marginally higher 19% tariff, putting Indian exporters at a relative advantage.