India-US Trade Agreement: The trade agreement between India and the US, which became public on February 2 2026, has established new tariff rates which end the prolonged trade disputes between the two countries. The United States will decrease its tariffs on Indian imports to 18% under the treaty, which eliminates previous tariffs that reached 50% during the previous year. The new law will create different effects on product prices, which will affect customers and businesses in both regions.
What Will Get Cheaper?
The tariff rollback will lead to price decreases for multiple product categories:
- Agricultural Products: The price of agricultural products, which include pulses, dairy products and processed foods, will decrease because of reduced import tariffs.
- Technology and Electronics: The price of laptops and gadgets, and electronic components will decrease because of lower expenses associated with imported technology products.
- Consumer Goods: Reduced tariffs will bring down the price of processed foods, packaged products, household appliances, and plastics.
- Medical and Industrial Imports: Tariff reductions will help multiple sectors, such as medical devices, pharmaceuticals, defence equipment, machinery and aircraft parts.
- Oil and Petroleum Products: The new trade rules will affect energy costs because India will increase its purchase of American crude oil and liquefied natural gas.
Items That May Stay Costlier
Many products will stay expensive because of high duties which continue to exist, and because of existing U.S. trade restrictions, even after tariffs decrease.
- Steel Aluminum and Copper: The U.S. Section 232 duties, which apply to these metals, maintain high tariff rates which protect their market prices from decline.
- Auto Components: The current duties on particular automotive parts will remain mostly unchanged regarding their present high pricing.
How will it Impact Overall?
The tariff rollback is expected to enhance Indian exports to the U.S. and support sectors like gems and jewellery, textiles, engineering goods and pharmaceuticals, while improving market sentiment and trade flows between the two nations.
