India and US announced a trade deal on February 2, 2026. A joint statement for the same was released on February 7, 2026.
“The detailed agreement is undergoing technical and legal processes in both governments and is expected to be signed once these processes are completed,” Minister of State for Commerce and Industry Jitin Prasada told Rajya Sabha.
In a separate reply, he said that in the trade deal announced on February 2, the US has agreed to reduce reciprocal tariffs on Indian goods to 18% from 50% while India committed to lower tariffs on a range of American products.
“The rate of 18% is lower than the tariffs imposed by the US on several competing countries, thereby enhancing India’s export competitiveness in the US market. The agreement also provides significant comparative advantage to Indian exporters, particularly in labour-intensive sectors and manufacturing,” Prasada said.
He explained that the government “continues to work to mitigate the impact of the US tariff measures on Indian exports through a comprehensive multi- pronged strategy”.
This encompasses intensive engagement with the US government for a mutually beneficial India-US Bilateral Trade Agreement, immediate relief through Trade relief measures of RBI, Credit Guarantee Scheme for Exporters, enhancement of domestic demand through next generation GST reforms, Export Promotion measures such as the new Export Promotion Mission which provide support and assistance to exporters, pursuing FTAs with new countries and better utilization of existing FTA.“It is expected that these measures will also enhance diversification and resilience in India’s trade relationships,” the minister said.
EU FTA
On the India-EU FTA which was concluded on January 27, Prasada said: “Ambitious services access, a future ready mobility framework and forward looking CBAM provisions together lay the foundation for inclusive, resilient and future ready growth”.
Under the pact, over 99% of Indian exports gain preferential entry, unlocking Rs 6.41 lakh crore ($75 billion) potential, including $33 billion in labour intensive sectors like textiles, leather, marine products, gems and jewellery.
The FTA creates opportunities for MSMEs, women, artisans, youth and professionals, with calibrated auto liberalisation supporting Make in India, favourable access for agricultural and processed food exports while safeguarding sensitive products and dairy, according to the minister.
“To stabilise and strengthen India’s export performance in 2026, the government has undertaken comprehensive measures as highlighted above with a major focus on market diversification and enhancing competitiveness,” he said, a key pillar of this strategy is leveraging FTAs and Preferential Trade Agreements.
As per Prasad, key efforts include expanding market access through FTAs, diversifying destinations and products, addressing tariff and non-tariff barriers, offering export incentives, and streamlining procedures through digital transformation. Over the past five years, India has concluded eight FTAs with Mauritius, UAE, Australia, EFTA TEPA, Oman, UK, New Zealand, and the EU.
In a separate reply, he said India has safeguarded sensitive sectors, including dairy, cereals, poultry, soymeal, certain fruits and vegetables, balancing export growth with domestic priorities in its free trade agreement with the EU.
The Trade and Sustainable Development chapter in the FTA takes a cooperative approach based on Parties’ respective levels of development, he said.
The tariff elimination and preferential market access secured under the proposed FTA across 97% of EU tariff lines covering more than 99% of India’s export value are expected to enhance the price competitiveness of Indian goods, particularly in labour-intensive and MSME-driven sectors, leading to expansion of trade volumes over time.
“The FTA will also facilitate greater inflow of FDI in services including financial services and Global Capability Centers (GCCs) from EU countries,” he said.