India–US Trade Deal Nears: What to Expect on Tariffs
While public rhetoric on both sides was firm, the governments of Prime Minister Modi and President Trump have been engaged in detailed backchannel negotiations. This diplomatic restraint, prioritizing substantive talks over public dialogue, appears to be yielding results.
The key to the breakthrough lies in a symbiotic agreement that allows both nations to claim a win: India is reportedly agreeing to gradually scale back its reliance on Russian oil, and in return, the US is prepared to significantly lower the tariffs.
The New Trade Landscape: 15-18% Tariffs
Sources close to the negotiations indicate the new tariff regime is expected to settle in the 15% to 18% range.
Higher than Peers: This rate is higher than tariffs currently applied to key US allies like Japan and Europe, reflecting the specific geopolitical context of the Russian oil issue.
Lower than the Rest: Crucially, this rate will be significantly lower than the duties currently faced by many other major global manufacturing hubs, positioning India for renewed, competitive growth.
This expected resolution provides the market clarity that many manufacturers have been waiting for. A stable, sub-20% tariff environment makes India an even more compelling destination for supply chain diversification.
The Path Forward for Global Sourcing
For companies that have been considering a ‘China Plus One’ strategy—especially those that have put plans on hold due to the August tariff spike—this is your signal.
The 2026 sourcing cycles are quickly approaching, and the time to act is now. Our team is actively tracking the final agreement and can help you immediately initiate your supply chain relocation strategy to meet your Tariff Mitigation Goals for 2026.
Don’t wait for the official handshake. The framework is set. Let’s turn this geopolitical resolution into a competitive advantage for your business.
Please email Director of Sales, Mike Dent mdent@mesinc.net for further discussion. Our India capabilities can be seen at www.bombaymetrics.com and www.mesinc.net
