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Ministry of Commerce and Industry | Federation of Indian Export Organisations (FIEO) | Ministry of External Affairs
The Federation of Indian Export Organisations (FIEO) has welcomed the finalisation of the India–US Trade Deal, described as the “Father of All Deals”, under which the United States will reduce tariffs on all Indian-made products to 18%. Under this landmark agreement, the United States has agreed to reduce tariffs on all Indian-made products to a unified 18 percent, down from previous levels that reached as high as 50 percent. This move significantly enhances the price competitiveness of Indian exports against other Asian suppliers and provides a strong impetus to India’s export growth across multiple sectors.
Sector-Wide Export Boost and MSME Integration The tariff rationalization is expected to provide a substantial impetus to India’s manufacturing and agro-based exports:
Key Beneficiaries: Engineering goods, textiles and apparel, pharmaceuticals, chemicals, leather products, gems and jewellery, and agricultural products are poised for significant gains.
MSME Empowerment: Lower tariffs will allow MSMEs to integrate more deeply into US-based supply chains, providing them with improved order visibility and contract certainty.
Revival of Orders: Labor-intensive sectors like apparel and footwear are likely to see a rapid release of orders that were previously put on hold due to high tariff uncertainty.
Investment and Employment Impacts Improved market access is expected to catalyze a new wave of industrial growth within India:
Capacity Expansion: The deal encourages firms to scale up production and attract fresh domestic and foreign investments into export-oriented units.
Job Creation: By boosting labor-intensive industries, the agreement supports large-scale employment generation, aligning with national goals for economic development.
Policy Relevance
The finalization of this trade deal represents a transition toward strategic economic alignment and global trade leadership.
Competitiveness Parity: By capping US tariffs at 18%, the policy removes the historical price disadvantage Indian apparel and leather exporters faced, allowing them to compete on quality and reliability rather than just cost.
Investment Attraction: The certainty provided by this long-term agreement is likely to attract Foreign Direct Investment (FDI) into export-oriented units, as global firms seek to diversify their manufacturing bases away from other regions.
Strategic Diplomacy: This deal validates India’s commitment to rules-based trade and reinforces the economic pillar of the India–US Comprehensive Global Strategic Partnership.
Relevant Question for Policy Stakeholders: How can the Ministry of Commerce and Industry collaborate with FIEO to ensure that MSME exporters are technically equipped to meet the anticipated 30% surge in US demand for high-value engineering and textile goods?
Follow the full news here: Finalisation of ‘Father of All Deals’ - India–US Trade Deal | FIEO