India–US trade deal: Trump’s tariff cut to 18% augurs well for India’s exports, says FM Sitharaman

US President Donald Trump's decision to cut tariffs on Indian goods from 50% to 18% augurs well for the country as it will boost exports, Finance Minister Nirmala Sitharaman said on Tuesday.

“So, actually our exports will pick up now, that is my expectation... along with having found new markets where they will continue to operate,” she said in an interview with news agency PTI.

“It is a good augury for them (exporters),” Sitharaman added, as Trump said on Monday that he is slashing tariffs on India from 50% to 18% under a newly announced trade deal. He also claimed that the US is removing a separate 25% punitive tariff linked to India's purchases of Russian crude oil.

However, the reductions in duties come with strings attached. President Trump mentioned that the deal was made in exchange for India lowering trade barriers and stopping its purchases of Russian oil, and instead buying oil from the US and potentially Venezuela.

Sectors such as steel, aluminium, textiles, engineering goods, and some agricultural products were particularly hard hit as higher duties led American buyers to shift orders to alternative suppliers.

If the trade deal is implemented, it would bring tariffs on India into line with those of most other Asian countries, around 15-19%. Currently, key regional competitors such as Vietnam and Bangladesh are facing duties of 20%, so this development is expected to erode India's price advantage in the US market.

Sitharaman said while the details of the agreement will be announced soon, the cut in tariffs is a “good auguring” for exporters. Taken together with the new markets exporters had tapped after becoming uncompetitive in the US, the “exports will pick up now,” she said during the interview.

There have also been $14 billion of equity outflows by foreign investors since July 2025 amid weak sentiment, the agency report said.

Earlier in the day, FM Sitharaman had posted about the development on X (formerly Twitter), calling the tariff reduction announcement “Good news for #MadeInIndia products.”

This move is set to offer major relief to a wide range of labour-intensive exports, including apparel, footwear, and jewellery makers, which had been hit by punitive 50% duties imposed in August, sharply eroding competitiveness and order flows in the market as people began seeking cheaper alternatives.