24 Oct 2026Updated 24 October 2026 · By Regi Tom Antony, FCA, MBA (Australia), ACMA (UK), CGMA (USA), CISA (USA)
An exporter client in Aluva who ships coir products to the US rang me last week. He had seen a headline saying the India–US deal was "finalised" and wanted to quote lower prices from next month.
Not yet. As at 24 October 2026, the first phase has been negotiated and is in legal drafting, but nothing has been signed and nothing is in force. Until it is signed and implemented, the duties your US buyer pays have not changed because of it.
I will update this page as things move.
How we got here
On 6 February 2026 (7 February in India), the two governments issued a joint statement announcing a framework for an interim trade agreement. The US said it would apply an 18% reciprocal tariff to many Indian goods, down from 25%, and remove tariffs on items such as generic medicines, gems and diamonds, and aircraft parts once the interim agreement was concluded. India said it would cut or remove duties on US industrial goods and many US farm products. The same day, the US removed the additional 25% duty it had imposed on Indian goods over Russian oil purchases.
On 20 February 2026 the US Supreme Court held that those reciprocal tariffs could not be imposed under the emergency powers law used. The US replaced them with a temporary 10% global tariff under Section 122, which expired on 24 July 2026. From that date it applied Section 301 duties after a forced-labour investigation, with India at 10%. Sector tariffs on steel, aluminium and copper continue. The February framework rested on tariffs that no longer existed, which is largely why the deal stalled.
What was said in October
On 5 October, Finance Minister Nirmala Sitharaman said the talks had reached a plateau. On 15 October, Commerce Minister Piyush Goyal and Commerce Secretary Rajesh Agrawal said the first phase had been finalised and was in legal drafting. Mr Goyal added that it would take effect only when India gets a competitive edge over peer countries, and Mr Agrawal said timing depends on the US settling its overall tariff structure. On 20 October, during his visit to India, US Secretary of State Marco Rubio called the deal "very, very close", with a small number of items left.
So the honest position is this: agreed in substance on the first phase, not signed, no date announced, and implementation tied to how US tariffs settle.
A trade deal is not a tax treaty
A trade agreement deals with customs duties and market access. It does not change income tax. The India–US Double Taxation Avoidance Agreement, in place since 1990, governs how profits, royalties, fees and dividends are taxed between the two countries, and nothing in the trade talks changes it.
What exporters can do while waiting
- Find the correct US tariff classification for each product you ship and check what duty your buyer pays today.
- Prepare for rules of origin. Lower duty goes only to goods that originate in India, usually meaning enough local value addition or a change in tariff classification here. Keep cost and sourcing records by product now.
- Read your contracts. Who bears a change in duty? Many price clauses are silent. A short clause sharing the gain or cost prevents disputes.
- Do not promise price cuts until a deal is signed and US customs actually applies the new rate.
People often ask me whether they should hold back shipments in the hope of lower duty. I would not, because no date has been announced. Others ask whether this affects their GST refunds on exports. It does not.
If you want to test your own position against this, write to us at letstalk@rtaandassociates.com. If you run a Gulf business from India, the tax questions are different, and I have covered them in running a Dubai company from India.
For how this fits with FEMA, treaties and GST more broadly, see our guide to cross-border tax and FEMA advisory.
Related guides
- Cross-border tax and FEMA advisory: the full guide
- Do service exporters now have to file an EDF? What the new FEMA export rules mean from 1 October 2026
- Is your overseas work really an "export of services" under GST? The five conditions, LUT, and the 2026 intermediary change
- The India–UK social security agreement: what employers and secondees need to know
Regi Tom Antony, FCA, MBA (Australia), ACMA (UK), CGMA (USA), CISA (USA)
Regi Tom Antony & Associates, Chartered Accountants, Kochi
This is general information based on the law as at 24 October 2026, not advice for your particular situation.