In the backdrop of the interim India-US trade agreement framework, India must prioritise trade openness and reforms to unlock long-term competitiveness, a new report showed on Monday.
These priorities are correcting inverted duty structures, streamlining logistics and customs to cut input costs, fostering assembly-based manufacturing for scale and employment and reducing protectionism, expanding FTAs, boosting R&D, and easing land/labour/skills constraints, according to a Systematix report.
“This integrated approach, disciplining firms through advanced manufacturing and embedding India deeper into GVCs, can elevate India’s manufacturing share and global standing, mitigating the risks of Donald Trump’s bargain while unlocking long-term competitiveness,” the findings showed.
The US–India trade deal grants India tariff relief and deeper market access but binds it to a $500 billion import commitment and an oil ban.
The US-India Bilateral Trade Agreement (February 7, 2026) emphasises reciprocal market access, with India committing to eliminate or reduce tariffs on US industrial goods, food, and agricultural products like Distillers Dried Grains with Solubles (DDGS), red sorghum, tree nuts, fruits, soybean oil, wine, and spirits.
In return, the US sets an 18 per cent reciprocal tariff on select Indian goods (textiles, apparel, leather, plastics, chemicals, machinery), with plans to remove tariffs on items like generic pharmaceuticals, gems, diamonds, and aircraft parts upon successful Interim implementation.
From the US standpoint, this structure aims to balance trade while addressing American concerns over market barriers.
“From India’s perspective, the deal provides tariff relief, reducing effective US duties on Indian exports to 18 per cent (below competitors’ rates), which the Indian Trade Minister has stated will boost labour-intensive sectors and initiatives such as Make in India and Atmanirbhar Bharat,” said the report.
It also ensures removal of national-security tariffs on Indian aircraft and parts, plus a preferential quota for automotive parts, supports aviation and manufacturing growth.
