Exclusive | US tariff cuts: Piyush Goyal says 50% exports get zero duty, MSMEs gain

The executive order issued by US President Donald Trump to reduce tariffs on Indian exports is expected to take effect as early as next week, even before the formal signing of the India-US trade agreement, Commerce and Industry Minister Piyush Goyal said in an exclusive interview with CNBC-TV18.

Goyal said the tariff reset would significantly improve market access for Indian goods, with around 50% of India’s exports to the US set to attract zero duty under the new framework.

From the other half, another

10-15% of exports, including steel and aluminium, will continue to face US Section 232 sectoral tariffs of up to 50%, while roughly 35% of exports will be subject to tariffs of around 18%.

Goyal confirmed that exporters would be able to avail of the revised 18% tariff regime from the date the US executive order comes into force and that India would continue to press US on reducing Section 232 tariffs on steel and aluminium as part of broader negotiations.

The minister said the agreement would deliver immediate gains for labour-intensive sectors and MSMEs, particularly textiles, machine parts and auto components.

Industries such as leather, footwear, sports goods, furniture, handicrafts and handloom products are expected to benefit right away, while farmers and fishermen would see a sharp rise in export opportunities, Goyal said.

Exports of agricultural and marine products are projected to nearly double from $54 billion to $100 billion, he said.

Goyal also shared that several product categories would receive zero-duty access to the US market. A product-wise breakup is provided in the accompanying chart.

Benefit of zero duties

Category	Products getting zero-duty access
Agriculture & food products	Spices, tea, coffee, avocados, shiitake mushrooms, cocoa, citrus juices, bakery products, banana pulp
Gems & jewellery	Gems and diamonds, coins
Consumer goods	Clocks & watches, home décor items
Metals & industrial products	Aluminium, zinc oxides

Separately, sources have told CNbc-TV18 that the trade deal will also see tariffs on American motorcycles in the 800cc–1,600cc segment reduced to zero, a category currently dominated by Harley-Davidson. No Indian manufacturer operates in this displacement range at present.

The sources also said tariffs on large diesel cars above 2,500cc and petrol cars above 3,000cc will be lowered to 50% initially and gradually reduced to 30% over a 10-year period, a move that is not expected to impact domestic automakers, as Indian SUV manufacturers largely operate below these engine capacities.

Goyal stressed that India’s core red lines had been fully protected in the negotiations, rejecting criticism from what he described as "vested interests".

Farmer outfits have slammed India-US trade deal and called for nationwide protests on February 12.

But Goyal stressed that all sensitive agricultural and food items, including dairy, poultry, meat, rice, wheat, sugar, soya, corn, millets, bananas, pulses and all genetically modified products, had been kept completely outside the trade deal.

Fruits such as bananas, cherries, strawberries and citrus fruits, along with honey, ethanol for fuel and tobacco, have also been excluded, he said.

“I will be talking to the farmer groups and recommend them to carefullyhave a look at the exempt list. Farmers are completely protected in all core and sensitive areas,” Goyal said.

Responding to objections from farmer groups, including the Bharatiya Kisan Sangh, over potential imports of soybean oil and DDG, Goyal said India was already importing soybean oil in large quantities and that once products are processed, genetically modified characteristics are eliminated.

On apples, the minister said India imports around 5.5 lakh tonnes annually, as domestic demand far exceeds production. The US has been offered an import quota that is lower than its current export volumes to India, he said. American apples will be subject to a minimum import price of ₹80 per kg and a duty of ₹20, setting a floor price around 33% higher than apples imported from other sources, thereby fully protecting Indian growers.

India and the US are targeting mid-March to sign the interim trade deal and are currently working on the legal text of the agreement.

Commerce Minister Piyush Goyal has invited US Trade Representative Jamieson Greer to New Delhi for the signing, with the final document expected to be a fully binding legal agreement that incorporates the agreed zero-duty concessions.

India and the US are targeting mid-March to sign the interim trade deal and are currently working on the legal text of the agreement. In the exclusive interview, Goyal said India has invited US Trade Representative Jamieson Greer to New Delhi for the signing, with the final document expected to be a fully binding legal agreement that incorporates the agreed zero-duty concessions.