DBS Group Research report, authored by Radhika Rao, notes that the US and India have agreed on a trade deal, reducing tariffs on Indian goods from 25% to 18%. This agreement is contingent on India’s continued reduction of oil purchases from Russia. The deal is expected to positively impact India’s exports and financial markets, with a relief rally anticipated in domestic markets following the announcement.
US lowers tariffs on Indian goods
“US President Trump announced overnight that US and India had agreed on a trade deal, under which reciprocal tariffs on India will be lowered to 18% from 25% earlier. There was no explicit mention of how the additional punitive tariff of 25% (due to Russian oil purchases) will be treated, although US Ambassador to India Sergia Gor said in press comments, that the final tariff rate will stand at 18% (vs 50% earlier).”
“This effectively takes India’s tariff close to most of the ASEAN countries and puts it at an advantageous position vs China. India’s goods exports to the US stood at $86.5bn in FY25 and imports at $46bn (~6.7% share in total imports).”
“At the onset, this breakthrough is unmistakably positive for the real economy/ exports, sentiments as well as financial markets, while further details are awaited.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Source: https://www.fxstreet.com/news/india-us-cuts-tariffs-on-india-dbs-202602031140
