India–US Interim Trade Deal to Give Major Push to ‘Make in India’: PM Modi

The newly announced interim trade agreement between India and the United States is set to provide a significant boost to the ‘Make in India’ initiative, opening up fresh opportunities for Indian exporters, businesses and the country’s youth workforce.

In a joint statement issued on Saturday, New Delhi and Washington unveiled key details of the pact, under which tariffs on a wide range of Indian goods entering the US market will be sharply reduced from as high as 50 per cent to 18 per cent substantially improving market access for Indian exporters.

Prime MinisterNarendra Modi welcomed the agreement, calling it a major step towards deepening economic engagement between the two countries, strengthening domestic manufacturing and expanding employment opportunities.

Posting 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. I thank President Trump for his personal commitment to robust ties between our countries.

 Boost for ‘Make in India’

Highlighting the domestic impact of the deal, the Prime Minister said the agreement would strengthen the ‘Make in India’ mission by opening new avenues for farmers, entrepreneurs, MSMEs, startups, fishermen and artisans.

“It will generate large-scale employment for women and youngsters,” Modi said, underlining the deal’s potential to drive inclusive economic growth.

Under the agreement, the revised 18 per cent tariff will apply across multiple labour-intensive and manufacturing sectors, including textiles and apparel, leather and footwear, plastic and rubber products, organic chemicals, home décor, artisanal goods and select categories of machinery.

The pact also provides for the withdrawal of reciprocal tariffs on a broad list of products once the interim agreement is fully concluded. These include generic pharmaceuticals, gems and diamonds, and aircraft parts sectors, where India enjoys strong global competitiveness.

Zero Tariffs, Preferential Access

Indian exporters are expected to gain further advantages through preferential tariff rate quotas for automotive components, aligned with US national security requirements under existing import proclamations.

In addition, tariffs on products such as generic medicines, precious stones and aircraft parts are set to drop to zero. Officials believe this will significantly widen India’s export footprint while strengthening domestic production ecosystems.

The agreement also includes exemptions under Section 232 for aircraft parts, negotiated outcomes for generic pharmaceuticals, and favourable terms for auto-sector measures, expected to deliver tangible gains for exporters.

 ‘Access to a $30 Trillion Market’

Commerce and Industry Minister Piyush Goyal said the trade framework would give Indian exporters access to a $30 trillion market, with MSMEs, farmers and fishermen among the biggest beneficiaries.

“Higher exports will lead to the creation of lakhs of new job opportunities, especially for women and young people,” Goyal said, adding that the agreement reflects a shared commitment by India and the US towards sustainable economic growth.

“This agreement will help India and the US remain focused on working together to deepen further economic cooperation for the benefit of our people and businesses,” he added.

Agriculture and Dairy Interests Protected

Even as market access expands, the Indian government has stressed that core agricultural and dairy interests will remain fully protected. Sensitive items such as maize, wheat, rice, soybeans, poultry, milk, cheese, ethanol (fuel), tobacco, certain vegetables and meat will be completely protected, a move aimed at sustaining rural incomes and livelihoods.

Also Read:  What Trump’s Tariff Cut Means for India’s Economy and Global Trade Position