In an unusual sequencing of trade policy, the United States is preparing to lower tariffs on a wide basket of Indian exports through an executive order, days before the interim India–US trade agreement is legally signed. Commerce and Industry Minister Piyush Goyal confirmed in an interview with CNBC-TV18 that the order could come into force within four to five days, allowing exporters to immediately benefit from the revised tariff regime.

This is not merely procedural acceleration. Since August 2025, Indian shipments to the US have faced duties of up to 50 percent, among the highest applied by Washington to any major trading partner. The expected reset would bring a large share of these tariffs down to as low as 18 percent, while nearly half of India’s exports to the US may move to zero duty under the new framework.

The legal trade document is still targeted for signing by mid-March, with US Trade Representative Jamieson Greer invited to New Delhi. But exporters will not have to wait for that formality. The tariff benefits, once notified through the executive order, become immediately usable.

This sequencing tells its own story. It signals political intent on both sides to demonstrate early economic gains, de-risk the negotiation climate, and build commercial momentum before the final agreement is inked.

According to Goyal, the tariff structure under the new arrangement broadly falls into three buckets :

• Around 50 percent of Indian exports to the US will attract zero duty

• Nearly 35 percent will face a reduced tariff of roughly 18 percent

• About 10–15 percent, including steel and aluminium, will continue to be covered under US Section 232 tariffs of up to 50 percent

The rollback also follows the removal of a 25 percent penalty linked to India’s Russian crude imports - a key irritant that had escalated duties in recent months.

This is a meaningful reset for exporters in textiles, auto components, leather goods, footwear, sports goods, furniture, handicrafts, handloom products and machine parts sectors where price competitiveness is highly sensitive to tariff changes and where India competes directly with Vietnam, Bangladesh, Mexico and parts of Southeast Asia.

The US is India’s largest export market. For labour-intensive and MSME-driven segments, tariff parity often determines whether orders are booked or lost.

By lowering duties ahead of the legal pact, Indian exporters regain pricing power immediately. This is particularly significant for sectors that have thin margins and operate on seasonal order cycles.

Goyal also indicated that farm and marine exports could nearly double from $54 billion to $100 billion as products such as tea, coffee, spices, fruits and seafood gain zero-duty or sharply reduced-duty access.

At the same time, politically sensitive agricultural categories dairy, poultry, meat, rice, wheat, sugar, pulses, millets, corn, soy, bananas and all genetically modified products have been kept fully outside the deal. This firewall reduces the risk of domestic political backlash while still enabling gains in non-sensitive agri categories.

Concerns around imports such as soybean oil, DDGS (animal feed input) and apples have also been addressed through quotas, minimum import pricing and duties that protect domestic producers.

Beyond tariffs on goods, the talks also touch on technology access. India is seeking easing of restrictions on GPUs and advanced chips, including supplies from NVIDIA, to support data centres, AI infrastructure and emerging tech ecosystems.

On the US side, tariffs on American motorcycles in the 800cc–1,600cc segment will move to zero a category dominated by Harley-Davidson with no Indian manufacturer presence. Similarly, tariffs on large petrol and diesel cars will be gradually reduced over a decade, a move officials argue will not disrupt domestic automakers due to the niche nature of the segment.

These elements show the deal is not restricted to traditional goods trade but is expanding into strategic technology and high-value mobility segments.

Indian equity markets reacted positively to the broader trade breakthrough, with the Nifty 50 rising 3.38 percent over the week. The move is being read as a structural positive for export-oriented sectors rather than a one-off diplomatic gesture.

From a policy standpoint, the executive order route suggests Washington wants to signal seriousness ahead of the formal pact, while New Delhi demonstrates that sensitive domestic constituencies remain protected.

Export-heavy sectors such as textiles, leather, handicrafts, auto components and marine products could see improved order flows and margin recovery. MSME clusters tied to these industries are likely to be early beneficiaries.

Logistics, ports and container freight operators may also see incremental volumes if export momentum picks up.

• Industrials and MSME manufacturing : Improved competitiveness versus Asian peers

• Agri and marine exports : Expanded access without compromising sensitive crops

• Auto components : Better positioning in US aftermarket and OEM supply chains

• Technology infrastructure : Potential easing of advanced chip access over time