Eighteen Percent and Many Unknowns: Planning an Export Business Around the India-US Deal

The Headline Tariff Cut: 18% and Emerging Frameworks

On 2 February 2026, a trade agreement between India and the United States was announced. India Briefing, published by Dezan Shira & Associates, reported on 3 February that US tariffs on Indian goods would fall to 18%.

Its text gave the earlier rate as 50%, while its own summary line said 25%; we flag that conflict and do not choose between them. The article also noted that exporters had hoped for a rate nearer 15%, and that some competitors still receive duty concessions of around 5% under the Generalised System of Preferences, a status India lost in 2019.

What Was Agreed and What Remains Unresolved

The report said President Trump had stated that India committed to buy more US energy, technology, agricultural and manufacturing goods, totalling more than $500 billion, but that India's Ministry of External Affairs had not confirmed this. Reports also said India had agreed to curb Russian oil purchases, though the article gave no details.

Commerce Minister Piyush Goyal, as reported by PTI, said the deal would expand market access for agricultural and processed goods, support technology collaboration and create jobs, and called it a source of "unprecedented opportunities."

India Briefing listed what remained unresolved: detailed tariff schedules and product lists, timelines, phase-downs of tariffs, rules of origin, non-tariff measures, and formal implementation through executive orders and cabinet approvals. The sectors it said could be affected included agriculture (rice and marine products), engineering goods, electronics, textiles, leather, apparel and gems and jewellery, with MSMEs potentially gaining through supply-chain integration. We have not independently confirmed later developments, so check the current position before relying on this.

“Unprecedented opportunities.”

The Exporter Strategy Checklist: Six Actionable Mandates

1. Re-price by product, not by country. Rate changes apply to specific goods. Check your tariff codes, not the headline.

2. Model three scenarios. A deal implemented as announced, a deal delayed, and a deal reversed. Know your margin in each.

3. Read the rules of origin. If your product includes imported inputs, check whether it will qualify for the lower rate. Poorly documented origin can erase the benefit.

4. Do not abandon other markets. The experience of smartphone exports, where a large share goes to one country, shows the risk of concentration. Keep or build customers in the Gulf, Europe, Africa and Southeast Asia.

5. Protect cash. Longer lead times and uncertain orders strain working capital. Review credit lines and receivable terms; our guide to TReDS covers one tool for MSMEs.

6. Document everything. Buyers and customs officers will ask for evidence of origin, cost and compliance.

Impact on MSME Exporters: Agility Under Volatility

Smaller exporters are the most exposed to swings in tariffs because they have less cash to absorb them and fewer alternative buyers. They are also often the most flexible. A firm that can shift product mix, add a certification or reach a new buyer quickly can benefit from a change in terms faster than a larger competitor.

Our reading: The announcement reduces one source of uncertainty, but it replaces it with another: how and when the terms will be applied. Until the schedules are published and implemented, the sensible approach is to plan for the better case but fund for the worse.

Essential Questions for Customs Agents, Buyers, and Banks

Before changing prices or committing capacity, ask your customs agent for the exact tariff line that applies to each product, and for written confirmation of when any change takes effect. Ask each US buyer how they plan to treat the duty: whether they will absorb it, share it or pass it on. A lower tariff is only useful if the buyer's order actually increases.

Finally, ask your bank whether pre-shipment and post-shipment credit terms will change, because a longer shipping cycle ties up cash.

None of these questions is exciting, but exporters who ask them early rarely have to renegotiate under pressure.

Internal Stakeholder Communication and Governance

Tell your team and your lenders what you know and what you do not. A short internal note that lists the announced rate, the unresolved items and the date by which you will review the plan stops rumours and keeps people focused.

Exporters who communicate early find that banks and buyers are more willing to be flexible, because they can see that the business has thought the risks through and has a plan for each outcome.

Editorial analysis. Based on a single secondary source; verify against official notifications before acting.