trade-insights

India Import-Export Weekly Roundup: February 3, 2026

John

— 2 min read

This week marks a historic transformation for Indian international trade as the government secures massive bilateral agreements with both the United States and the European Union. These deals are set to redefine market access and cost structures for domestic manufacturers and entrepreneurs across several sectors.

1. US Slashes Import Tariffs on Indian Goods to 18 Percent

A breakthrough reciprocal trade agreement between India and the United States has led to an immediate reduction in duties for Indian exports. This move aims to accelerate bilateral trade toward a $500 billion target by 2030, providing a significant competitive advantage for Indian products in the American market.

  • The United States has reduced the reciprocal tariff on Indian-made products from 25% down to 18% effective immediately.
  • India has committed to lowering both tariff and non-tariff barriers for American goods, with a goal of reaching zero duties on specific items.
  • The agreement is expected to more than double current bilateral trade levels from the existing $191 billion within the next four years.

2. India-EU Free Trade Agreement Unlocks Access to 24 Trillion Dollar Market

India and the European Union have successfully concluded negotiations for a comprehensive Free Trade Agreement (FTA) that integrates the world’s second and fourth-largest economies. This deal removes long-standing trade barriers and establishes a deep market partnership for over two billion people across both regions.

  • The FTA grants duty-free or preferential access for more than 99% of Indian exports by total trade value.
  • Domestic businesses now have direct entry points into a combined European market valued at approximately Rs 2,091.6 Lakh Crore.
  • While opening markets, the agreement includes specific protections for India's sensitive developmental sectors and policy interests.

3. Strategic Energy Pivot: India to Replace Russian Oil with US Supplies

In a major shift in procurement strategy, India has agreed to halt the purchase of Russian oil to strengthen its trade ties with the United States. This transition is part of a broader commitment to diversify energy sources and support global stability through new Western partnerships.

  • India will significantly increase its energy imports from the United States and potentially Venezuela as it moves away from Russian crude.
  • The deal includes a commitment from India to purchase over $500 billion in American energy, technology, coal, and agricultural products.
  • This procurement shift is a key component of the new trade concessions granted by the US administration to Indian exporters.

4. New Trade Framework Boosts Tech Transfer for Indian MSMEs

The latest bilateral agreements prioritize the modernization of India's small and medium enterprises through enhanced technology sharing. By facilitating easier access to American and European innovations, the deals aim to turn local manufacturers into global suppliers under the 'Make in India' banner.

  • The US-India deal specifically focuses on co-creating technologies and co-developing industrial solutions for global markets.
  • MSMEs and entrepreneurs will receive unprecedented support to 'Design in India' and 'Innovate in India' for international consumption.
  • Reduced trade barriers will allow smaller firms to integrate more easily into global value chains with lower overhead costs.

5. Budget 2026 Aligns Fiscal Policy with Global Export Expansion

Following the new trade announcements, the Indian government is tailoring its domestic economic strategy to support high-volume international commerce. The focus is shifting toward creating a 'Viksit Bharat' by 2047 by leveraging these new trade corridors and attracting massive foreign direct investment.

  • Policy changes are being implemented to ensure 'Make in India' products meet the standards required for the now-accessible US and EU markets.
  • The government is prioritizing 'paisa vasool' or value-driven infrastructure to lower the logistics costs for exporters.
  • Special emphasis is being placed on 'Design in India' initiatives to move domestic exports up the value chain from raw materials to finished goods.

Businesses should now review their supply chains to capitalize on the 7% tariff reduction in the US and the duty-free access expanding across the European Union.

Source: Economic Times

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