US Tariffs on Indian Imports Likely to Fall to 15%-16%: Energy, Agriculture Focus

India and the United States are reportedly on the verge of finalising a major trade agreement that could significantly reduce US tariffs on Indian goods. According to reports from Mint, the deal may bring tariffs down to 15–16% from current levels of up to 50%, marking a substantial improvement for Indian exporters.

The proposed agreement primarily focuses on the energy and agriculture sectors, reflecting the key priorities of past trade negotiations between the two nations. A notable element under discussion is India’s gradual reduction of crude oil imports from Russia, aligning with Washington’s efforts to curb global reliance on Russian energy supplies. Officials suggest the talks are in their final stages, with both sides aiming to conclude the deal ahead of the upcoming ASEAN Summit, where a formal announcement could be made.

In agriculture, India may permit higher imports of select US products, including non-genetically modified corn and soymeal. This move addresses longstanding US concerns regarding access to India’s highly protected agricultural market. In return, US tariff reductions are expected to improve the competitiveness of Indian exports in key sectors such as textiles, engineering goods, and pharmaceuticals. The agreement may also include a mechanism for periodic tariff and market access reviews to maintain balanced trade terms over time.

The development follows a recent phone call between US President Donald Trump and Indian Prime Minister Narendra Modi, during which trade and energy cooperation were discussed. Trump confirmed India’s commitment to reduce Russian oil imports, while Modi highlighted the importance of strengthening bilateral ties. The potential deal is expected to mark a milestone in India-US trade relations, representing the most significant progress since talks stalled in 2020 over tariff disputes.

Experts believe the reduction in US tariffs could provide a major boost to Indian exporters, while allowing American companies greater access to India’s rapidly growing consumer market. However, the condition on reduced Russian oil imports may require India to carefully balance energy security with geopolitical considerations.

If finalised, the pact would underscore renewed cooperation between New Delhi and Washington, enhancing trade and strategic ties. Indian exporters are likely to gain from lower tariffs, while US agricultural producers could expand their footprint in India, creating a mutually beneficial arrangement in global trade.