19 Feb 2026·Source: The Hindu

5 min

International RelationsEconomyNEWS

US Tariffs on Indian Imports Likely to Reduce to 18%

US may soon reduce tariffs on Indian imports from 25% to 18%.

Photo by shalender kumar

The U.S. President is expected to reduce tariffs on imports from India to 18% from the current 25% without issuing a fresh Executive Order. A senior official from the Ministry of Commerce and Industry stated that Mr.

Trump can update the U.S. Federal Register with the new tariffs. As per a February 6 joint statement, the U.S.

agreed to cut reciprocal tariffs on imports from India to 18% from the 25% set in July 2025. The U.S. had earlier imposed a 25% penal tariff on Indian goods due to India’s energy trade with Russia, bringing the total tariffs to 50%.

Executive Order 14384 removed the 25% penal tariffs linked to India’s import of Russian oil from February 7. The official indicated that the reduction of the remaining 25% reciprocal tariffs to 18% is expected soon, possibly within 3-4 days or early next week.

Key Facts

The U.S. President is expected to reduce tariffs on imports from India to 18%.

The current tariff rate is 25%.

The reduction can be implemented by updating the U.S. Federal Register.

A joint statement on February 6 indicated the U.S. agreed to cut reciprocal tariffs.

The U.S. had imposed a 25% penal tariff on Indian goods due to India’s energy trade with Russia.

UPSC Exam Angles

GS Paper 2: Bilateral relations between India and the USA, impact of trade policies on international relations.

GS Paper 3: Impact of tariffs on Indian economy, trade agreements and their implications.

Potential question types: Statement-based MCQs on trade relations, analytical questions on the impact of tariff reductions.

In Simple Words

The U.S. is likely to lower the tax (tariff) on goods it buys from India. Right now, it's like paying 25% extra on those items. Soon, it might be just 18%. This could happen without the President signing a new order.

India Angle

This is good news for Indian businesses that sell things to America. If the tax is lower, their products become cheaper for Americans. This could help Indian companies sell more and make more money.

For Instance

Think of it like buying clothes from a local shop versus a fancy mall. If the mall reduces its sales tax, more people might shop there. Similarly, lower tariffs make Indian goods more attractive to U.S. buyers.

Lower tariffs can lead to more trade and potentially lower prices for consumers. It affects the prices of goods you might buy that are made in India.

Lower tariffs mean Indian products can compete better in the U.S. market.

Visual Insights

US-India Tariff Changes

Key tariff changes between the US and India as per the news article.

Current US Tariff on Indian Imports: 25%
Expected US Tariff on Indian Imports: 18%
Penal Tariff Removed: 25%

More Information

Background

The current situation stems from a history of trade relations and tariff adjustments between the U.S. and India. The U.S. had imposed a 25% penal tariff on certain Indian goods in response to India's energy trade with Russia, effectively raising the total tariffs to 50%. This action was taken within the framework of the U.S.'s trade policies, which allow for such measures in response to what it perceives as unfair trade practices or actions that undermine its economic interests. These tariffs are essentially reciprocal tariffs, meaning they are imposed in response to similar actions taken by the other country. Executive Order 14384, mentioned in the news, played a crucial role in altering this landscape. This order specifically removed the 25% penal tariffs that were linked to India’s import of Russian oil, effective from February 7. The removal of these tariffs indicates a shift in the U.S.'s stance, possibly influenced by diplomatic negotiations or a reassessment of the economic impact of these tariffs. The expected reduction of the remaining 25% reciprocal tariffs to 18% is a continuation of this trend towards normalizing trade relations between the two countries. This entire situation highlights the complexities of international trade and the use of tariffs as a tool in trade negotiations and policy implementation. The U.S. Federal Register is a daily journal of the U.S. government. It contains federal agency regulations, proposed rules, and public notices. The fact that the U.S. President can update the U.S. Federal Register with the new tariffs indicates the administrative mechanism through which these trade policy changes are implemented. This register serves as the official record of these changes and ensures transparency in the process.

Latest Developments

In recent years, there has been a noticeable trend towards re-evaluating and adjusting trade tariffs globally. Many countries, including the U.S. and India, have been actively involved in bilateral and multilateral trade negotiations to address trade imbalances and promote fair trade practices. These negotiations often involve discussions on tariff reductions, market access, and the removal of trade barriers. The current U.S. administration has shown a willingness to use tariffs as a tool for negotiation, but also a flexibility to adjust these tariffs based on evolving economic and geopolitical considerations.

Looking ahead, the focus is likely to remain on fostering stronger trade relationships and resolving trade disputes through dialogue and negotiation. The expected reduction of tariffs on Indian imports by the U.S. could pave the way for further cooperation in various sectors, including technology, energy, and defense. Both countries have expressed interest in expanding their economic partnership, and addressing trade-related issues is a key step in achieving this goal. The future may also see increased emphasis on digital trade and the development of common standards for e-commerce, which could further boost trade between the two nations.

India has been actively pursuing Free Trade Agreements (FTAs) with various countries and blocs to boost its exports and integrate further into the global economy. The recent focus has been on diversifying trade partners and reducing dependence on specific markets. The tariff reductions by the U.S. can be seen as a positive step in strengthening bilateral trade relations, but India will likely continue to pursue a multi-pronged approach to trade policy, engaging with multiple partners and exploring new opportunities for economic cooperation.

Frequently Asked Questions

1. What are the key facts about the US tariffs on Indian imports that are important for the UPSC Prelims exam?

Key facts include the expected reduction of tariffs to 18% from the current 25%. The U.S. President can implement this by updating the U.S. Federal Register. A previous penal tariff of 25% was imposed due to India’s energy trade with Russia.

Exam Tip

Remember the percentages: 25% (current) and 18% (expected). Also, note the role of the U.S. Federal Register in implementing the change.

2. Why is the potential reduction of US tariffs on Indian imports newsworthy?

This reduction is significant because it impacts the trade relationship between the U.S. and India. It suggests a potential easing of trade tensions and could lead to increased trade volume. It also reverses a previous decision to impose penal tariffs due to India's energy trade with Russia.

Exam Tip

Consider how this event fits into the broader context of US-India relations and global trade dynamics.

3. What are 'reciprocal tariffs,' and how do they relate to the current situation between the U.S. and India?

Reciprocal tariffs are tariffs that one country imposes on another in response to tariffs that the other country has imposed on it. In this case, the U.S. had imposed a 25% penal tariff on Indian goods due to India’s energy trade with Russia, and the current reduction is a reciprocal measure agreed upon in a February 6 joint statement.

Exam Tip

Understand the concept of reciprocal tariffs and how they are used in international trade relations.

4. What are the potential implications of reduced US tariffs on Indian imports for Indian businesses and the common citizen?

Reduced tariffs could lead to increased exports from India to the U.S., benefiting Indian businesses. This could also lead to lower prices for consumers in the U.S. and potentially increased economic activity in India. However, the impact on the common citizen might be indirect and depend on how businesses pass on the benefits.

Exam Tip

Consider the potential economic and social impacts of trade policy changes.

5. What is the role of the U.S. Federal Register in implementing tariff changes, and why is it significant?

The U.S. Federal Register is a daily journal of the U.S. government that publishes proposed and final rules and regulations. The U.S. President can update the U.S. Federal Register with the new tariffs. It is the official way to announce and implement changes to tariff policies.

Exam Tip

Understanding the U.S. Federal Register helps in understanding the administrative procedures of the U.S. government.

6. What important dates should be remembered regarding US tariffs on Indian imports?

Key dates include February 6, when a joint statement indicated an agreement to cut reciprocal tariffs, and July 2025, when the U.S. initially set tariffs on imports from India at 25%.

Exam Tip

Create a timeline of events to better remember the sequence of actions related to the tariffs.

Practice Questions (MCQs)

1. Consider the following statements regarding the recent developments in US-India trade relations: 1. The U.S. President is expected to reduce tariffs on imports from India to 18% from the current 25% without issuing a fresh Executive Order. 2. Executive Order 14384 removed the 25% penal tariffs linked to India’s import of Russian oil from February 7. Which of the statements given above is/are correct?

A.1 only
B.2 only
C.Both 1 and 2
D.Neither 1 nor 2

Show Answer

Answer: C

Both statements are correct. Statement 1 is correct because the U.S. President is expected to reduce tariffs on imports from India to 18% from the current 25% without issuing a fresh Executive Order. Statement 2 is correct because Executive Order 14384 removed the 25% penal tariffs linked to India’s import of Russian oil from February 7, as per the news summary.

2. In the context of international trade, what are 'reciprocal tariffs'?

A.Tariffs imposed only on agricultural products
B.Tariffs imposed by a country on imports from another country in response to similar tariffs imposed by the latter
C.Tariffs that are fixed and cannot be changed
D.Tariffs that are imposed only on luxury goods

Show Answer

Answer: B

Reciprocal tariffs are tariffs imposed by a country on imports from another country in response to similar tariffs imposed by the latter. This is a common practice in international trade relations where countries use tariffs as a tool to negotiate trade terms and address trade imbalances. The news mentions that the U.S. had imposed a 25% penal tariff on Indian goods due to India’s energy trade with Russia, which is an example of reciprocal tariffs.

3. Which of the following statements is NOT correct regarding the U.S. Federal Register?

A.It is a daily journal of the U.S. government.
B.It contains federal agency regulations.
C.It contains proposed rules and public notices.
D.It is managed by the World Trade Organization (WTO).

Show Answer

Answer: D

The U.S. Federal Register is a daily journal of the U.S. government that contains federal agency regulations, proposed rules, and public notices. It is NOT managed by the World Trade Organization (WTO). The U.S. President can update the U.S. Federal Register with new tariffs, indicating the administrative mechanism through which trade policy changes are implemented.