US India Trade Tariffs Deal Statistics 2026 | Key Facts

US India Trade Deal & Tariffs in 2026

The trade relationship between the United States and India reached a significant milestone in February 2026 when both nations finalized a framework agreement that fundamentally reshaped their bilateral commerce landscape. President Donald Trump announced on February 2, 2026, that the United States would reduce its reciprocal tariff rate on Indian goods from 50% to 18%, marking one of the most substantial tariff adjustments in recent US-India trade history. This agreement came after months of intense negotiations and diplomatic efforts, during which India faced some of the highest US tariff rates among major economies. The deal represents a critical reset in bilateral economic relations following a period of heightened trade tensions that began in August 2025 when the Trump administration imposed punitive tariffs on India over its purchases of Russian oil.

The 2026 US-India trade tariffs deal encompasses multiple dimensions beyond simple tariff reductions, including commitments from India to purchase over $500 billion worth of US goods across various sectors such as energy, technology, agriculture, defense, and pharmaceuticals. This agreement positions the United States as India’s largest trading partner for the fourth consecutive year, with total bilateral trade reaching $131.84 billion in fiscal year 2024-25. The tariff framework announced in February 2026 aims to address the persistent trade deficit that the United States maintains with India, which stood at $45.8 billion for goods in 2024 and has been growing steadily. Indian exporters across pharmaceuticals, textiles, engineering goods, and information technology services stand to benefit significantly from the reduced tariff burden, while US agricultural producers and energy companies gain expanded market access to India’s 1.4 billion consumers.

Key Interesting Facts About US-India Trade Tariffs Deal 2026

Data Source: US Census Bureau Foreign Trade Statistics, US Trade Representative Office, White House Official Statements, Ministry of Commerce and Industry (India), February 2026

The data presented in this table reveals the transformative nature of the 2026 US-India trade tariffs agreement. The reduction from a combined 50% tariff burden to 18% represents a 64% decrease in tariff costs for Indian exporters, potentially saving billions of dollars annually in trade taxes. This tariff relief comes at a critical time when India’s merchandise exports to the United States grew 15.88% year-over-year between January and November 2025, demonstrating strong underlying demand despite the tariff headwinds. The commitment by India to purchase over $500 billion in US goods over the coming years is particularly noteworthy, as this figure represents approximately 85% of India’s total annual government budget unveiled in early 2026, indicating the scale of economic commitments involved.

The agreement’s structure places India’s 18% tariff rate strategically between the 15% rate applied to traditional US allies like Japan and South Korea, and the 19-20% rates imposed on competitive Asian exporters like Vietnam and Bangladesh. This positioning reflects both the substantial trade deficit concerns and the strategic importance of the US-India relationship. The elimination of tariffs on US industrial goods and the opening of agricultural markets represent significant concessions from India, which has historically maintained protective barriers especially in the agricultural sector where nearly half of India’s 1.4 billion population depends on farming for their livelihoods. The $102 million services trade surplus achieved by the United States in 2024 marks a reversal from the $76 million deficit in 2023, demonstrating shifting competitiveness in high-value service sectors.

US-India Trade Deal 2026: Sector-Specific Commitments

Data Source: White House Statements, US Trade Representative, Reuters, Ministry of Commerce India, February 2026

The sector-specific commitments outlined in the February 2026 framework represent a comprehensive restructuring of US-India commercial relations across virtually all major industries. The energy sector stands as the cornerstone of India’s over $500 billion total purchase commitment, with estimates suggesting $200+ billion will flow to US energy companies over the coming years. This includes purchases of crude oil, liquefied natural gas (LNG), coal, and related energy products, representing a dramatic shift from India’s previous reliance on Russian oil which had been a major point of contention. India’s state-run refiners already signed their first long-term deal with the United States in late 2025 to import 2.2 million tons of liquefied petroleum gas in 2026, signaling the beginning of this energy realignment.

In the agriculture sector, India agreed to eliminate tariffs on specific high-value US exports including tree nuts (almonds, walnuts, pecans), fruits (apples, cherries), vegetables, wine, and spirits (bourbon, whiskey), opening its market of 1.4 billion consumers to American farmers. However, India maintained protection for sensitive commodities including rice, beef, soybeans, sugar, and dairy, which remain excluded just as they were in India’s recent trade agreement with the European Union. The defense sector commitments of $75-100 billion reflect India’s massive military modernization program and strategic shift toward Western defense suppliers, particularly for fighter aircraft, maritime patrol aircraft, helicopters, missile systems, and radar technology. The automobile sector agreement requires India to immediately reduce its 110% tariff on imported vehicles to 40%, with further reductions to 10% over time, addressing longstanding complaints from US and European automakers about market access barriers. The pharmaceutical and technology sectors represent two-way commitments, with India maintaining its position as a leading supplier of generic drugs and IT services to the United States while committing to increase purchases of active pharmaceutical ingredients (APIs), specialty pharmaceuticals, telecommunications equipment, and cloud computing services from American companies.

US-India Bilateral Trade Volume Statistics 2024-2025

Data Source: US Census Bureau Trade in Goods with India (c5330), US Bureau of Economic Analysis, February 2026

The bilateral trade statistics between the United States and India for 2024 and early 2025 demonstrate a robust and expanding economic relationship despite the tariff tensions that emerged during this period. Total US exports to India reached $41.54 billion in 2024, representing a modest 3.0% increase from 2023 levels. This growth occurred even as trade negotiations remained contentious and uncertainty persisted about future tariff structures. The export figures through August 2025 show $29.31 billion, putting the full-year trajectory on pace to exceed 2024 totals. Meanwhile, US imports from India totaled $87.34 billion in 2024, growing at a faster 4.5% rate compared to the previous year, which contributed to the widening trade deficit that became a central focus of the Trump administration’s trade policy.

The $45.80 billion goods trade deficit in 2024 represented a 5.9% increase over 2023, continuing a multi-year trend of expanding deficits that have concerned US policymakers. Through the first eight months of 2025, the deficit reached $44.06 billion, suggesting an annualized deficit potentially exceeding $66 billion if the monthly trend continued unchanged. The services sector tells a different story, with US services exports to India surging 15.9% to reach $41.75 billion in 2024, while services imports grew at a nearly identical 15.4% rate to $41.65 billion. This balanced growth in services trade resulted in a small $102 million surplus for the United States, marking the first services surplus with India since 2023 and highlighting American competitiveness in high-value service sectors including travel, professional services, and intellectual property licensing.

Monthly US-India Trade Flows in 2025

Data Source: US Census Bureau Foreign Trade Statistics, Trade in Goods with India, February 2026

The month-by-month trade data for 2025 reveals significant volatility in bilateral commerce, particularly in the import figures which show substantial fluctuations throughout the year. March 2025 stands out with the highest monthly import value of $11.19 billion, creating the largest single-month trade deficit of -$7.42 billion. This spike in March imports likely reflects stockpiling behavior by Indian exporters and US importers anticipating potential tariff increases, as well as seasonal patterns in key export categories like pharmaceuticals and textiles. The trade deficit remained elevated through the spring and summer months, consistently exceeding $5 billion per month from March through July 2025, demonstrating the structural nature of the trade imbalance.

US exports to India showed relative stability, ranging from a low of $3.20 billion in January to a high of $3.96 billion in April, before moderating in the summer months. The $29.31 billion in total exports through August represents steady engagement by American businesses with the Indian market despite tariff uncertainties. US imports from India showed greater variation, with the $73.37 billion cumulative total through August 2025 placing the year on track for approximately $110 billion in annual imports, which would represent a significant increase over the $87.34 billion imported in 2024. The $44.06 billion deficit accumulated in just eight months approached the entire $45.80 billion annual deficit from 2024, underscoring the accelerating trade imbalance that motivated the Trump administration’s aggressive tariff policies and ultimately led to the February 2026 framework agreement.

Tariff Rate Changes in US-India Trade Deal 2026

Data Source: White House Official Statements, US Trade Representative Office, Reuters, CNBC, February 2026

The tariff rate changes implemented through the February 2026 US-India trade framework represent one of the most dramatic shifts in bilateral trade policy in recent years. The reduction of the combined US tariff burden from 50% to 18% constitutes a 64% decrease in the effective tariff rate, translating to substantial cost savings for Indian exporters across all product categories. This 32 percentage point reduction reverses the punitive tariff structure imposed in August 2025, when the Trump administration added a 25% surcharge specifically targeting India’s purchases of Russian oil on top of the existing 25% reciprocal tariff. The elimination of the 25% punitive component represents a major concession by the United States in exchange for India’s commitment to halt Russian oil imports and significantly increase purchases of American goods.

The commitment by India to reduce its tariffs on US industrial goods to zero from an average of approximately 13.5% represents a substantial market opening for American manufacturers. This complete elimination of industrial tariffs places US exporters on equal footing with domestic Indian producers in terms of tariff costs, though non-tariff barriers and regulatory requirements will continue to play significant roles in market access. The agricultural sector agreements show selective liberalization, with India committing to zero tariffs on specific categories including tree nuts, fruits, vegetables, wine, and spirits, while notably excluding sensitive commodities like rice, beef, soybeans, sugar, and dairy products that remain protected to safeguard Indian farmers. The phased reduction of automobile tariffs from 110% to 40% immediately and eventually to 10% addresses longstanding US complaints about market access for American and European automakers, though the timeline for reaching the final 10% rate has not been publicly specified. The 18% US tariff rate on Indian goods positions India between the 15% rate for close allies like Japan and South Korea and the 19-20% rates for competitive exporters like Vietnam and Bangladesh, reflecting both ongoing trade deficit concerns and the strategic importance of the bilateral relationship.

Top US Export Categories to India in 2024

Data Source: US Census Bureau, USA Trade Online, US Trade Representative, 2024 Annual Data

The composition of US exports to India in 2024 reveals a diverse portfolio dominated by energy products, precious materials, and high-technology machinery. Petroleum and coal products emerged as the single largest export category at $7.8 billion, representing nearly one-fifth of all US exports to India and growing at a robust 12.3% annual rate. This strong performance in energy exports reflects India’s status as the world’s third-largest oil importer and growing energy consumption driven by economic expansion and industrialization. The $6.2 billion in precious stones and metals exports, primarily diamonds, highlights the deep integration of US and Indian gem and jewelry supply chains, with India serving as a major cutting and polishing center for diamonds before re-export to global markets.

Machinery and equipment categories collectively account for more than one-quarter of US exports, with non-electrical machinery contributing $4.9 billion and electrical machinery adding $3.4 billion. The $3.7 billion in aircraft, spacecraft, and parts exports grew at an impressive 15.2% annual rate, reflecting India’s massive investments in civil aviation infrastructure and defense modernization. Medical and optical instruments exports of $2.8 billion grew 10.4%, serving India’s expanding healthcare sector and growing middle class demand for advanced medical technology. The diverse “all other exports” category representing $7.1 billion includes agricultural products, chemicals, vehicles, and various manufactured goods, demonstrating the breadth of US-India commercial ties. Under the 2026 trade framework, these export categories are expected to benefit from reduced Indian tariffs, particularly in industrial goods where rates will drop to zero, and expanded market access in select agricultural products, potentially driving annual export growth into double digits.

Top US Import Categories from India in 2024

Data Source: US Census Bureau Foreign Trade Statistics, USA Trade Online, 2024 Annual Data

US imports from India in 2024 totaled $87.3 billion, with pharmaceutical products dominating at $14.6 billion or nearly 17% of all imports. India’s position as the “pharmacy of the world” is well-established, supplying approximately 40% of generic drugs consumed in the United States and providing affordable medicines across therapeutic categories. The 9.8% annual growth in pharmaceutical imports reflects increasing US dependence on Indian generic manufacturers, particularly for high-volume, price-sensitive medications. Precious stones and metals, primarily cut and polished diamonds and gold jewelry, contributed $12.3 billion, making it the second-largest import category and highlighting India’s dominance in global diamond processing where it handles approximately 90% of the world’s diamond cutting and polishing by volume.

The $6.8 billion in organic chemicals imports growing at 11.5% annually supports US pharmaceutical, agricultural, and industrial manufacturing sectors with intermediate chemical inputs. Electrical machinery and equipment imports of $6.2 billion surged 14.3%, driven by Indian production of telecommunications equipment, semiconductors, and consumer electronics. The traditional apparel and textiles sectors contributed $9.1 billion combined, maintaining India’s position as a significant supplier of clothing and fabric to the US market despite competition from Bangladesh, Vietnam, and other Asian exporters. The $4.7 billion in refined petroleum products imported from India, growing at a remarkable 18.9%, reflects India’s substantial refining capacity and its role as a regional petroleum products hub.

Historical US-India Trade Deficit Trends (2020-2025)

Data Source: US Census Bureau Trade Statistics, 2020-2025 Data Series

The historical trend in the US-India trade deficit reveals a persistent and growing imbalance that became a central driver of the Trump administration’s decision to impose high tariffs and ultimately negotiate the February 2026 framework agreement. The 2020 pandemic year saw the deficit contract to $24.17 billion as both imports and exports declined sharply, but this proved temporary as 2021 brought a sharp 38.6% increase in the deficit to $33.49 billion driven by India’s rapid export recovery. The deficit continued expanding through 2022 when it reached $38.70 billion, representing a 15.6% increase, and accelerated further in 2023 to $43.24 billion with an 11.7% growth rate.

The $45.80 billion deficit in 2024 marked a continuation of this upward trajectory with a more modest 5.9% increase, but the most concerning development came in the first eight months of 2025 when the deficit reached $44.06 billion, putting the year on pace for an estimated annual deficit of $66 billion representing a projected 44.1% increase. This dramatic acceleration in the deficit, driven primarily by surging US imports from India while exports remained relatively stagnant, provided the Trump administration with the economic justification for the 50% tariff imposed in August 2025. The deficit growth also reflects fundamental structural factors including India’s competitive advantages in pharmaceutical manufacturing, generic drug production, IT services, textiles, and light manufacturing, combined with significant Indian tariff and non-tariff barriers that have historically limited US export growth. The 2026 trade framework aims to address this structural imbalance through a combination of reduced US tariffs to boost Indian export competitiveness while simultaneously requiring India to dramatically increase purchases of US goods across energy, defense, agriculture, and technology sectors, with the explicit goal of more than doubling bilateral trade to $500 billion by 2030 and creating a more balanced commercial relationship.

Impact Assessment: Before and After 2026 Trade Deal

Data Source: US Census Bureau, Economic Impact Analysis, Industry Projections, February 2026

The before-and-after comparison of the 2026 trade framework demonstrates the transformative potential of the agreement across multiple economic dimensions. The immediate reduction in the effective US tariff rate from 50% to 18% creates an estimated $28 billion in annual tariff cost savings for Indian exporters based on 2024 import volumes, representing a massive boost to the price competitiveness of Indian goods in the US market. This tariff relief is expected to catalyze a surge in Indian exports, particularly in sectors like pharmaceuticals where India’s generic drug manufacturers can now compete more effectively on price, potentially increasing exports by 23-51% to reach $18-22 billion annually. The improved tariff position should also help India’s GDP growth rate, which the International Monetary Fund had projected at 6.2% for 2025 amid trade headwinds, with economists now estimating the tariff framework could add 0.6 to 1.0 percentage points to growth rates.

For the United States, the agreement opens substantial new export opportunities, particularly in energy and agriculture sectors. US energy exports to India, which totaled $7.8 billion in 2024, are targeted to increase 300-400% to reach $30-40 billion annually within five years as India shifts from Russian oil to American crude oil, LNG, and coal. US agricultural exports, historically constrained by Indian protective tariffs and non-tariff barriers at around $2.5-3 billion annually, could see 100-200% growth to $5-8 billion as India eliminates tariffs on tree nuts, fruits, vegetables, wine, and spirits, though sensitive commodities like rice, beef, and dairy remain protected. The cumulative effect of India’s $500 billion purchase commitment across energy, defense, agriculture, technology, and other sectors is estimated to support 120,000-150,000 additional American jobs over the coming years, concentrated in manufacturing, agriculture, and energy extraction industries. The agreement also targets a dramatic expansion in total bilateral trade from $128.9 billion in goods in 2024 to $500 billion by 2030, representing a 288% increase that would make India one of America’s top five trading partners and create one of the most dynamic bilateral commercial relationships in the global economy.

Disclaimer: This research report is compiled from publicly available sources. While reasonable efforts have been made to ensure accuracy, no representation or warranty, express or implied, is given as to the completeness or reliability of the information. We accept no liability for any errors, omissions, losses, or damages of any kind arising from the use of this report.

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