As India navigates its interim trade agreement with the United States, a pivotal report warns of the need for bolder steps. Long-term competitiveness demands openness in trade coupled with deep-seated reforms, according to Systematics’ latest insights.
Experts outline a roadmap: correct inverted tariffs to ease raw material burdens, simplify logistics and customs for cost efficiencies, scale up assembly-line manufacturing for jobs and output, dial back protectionist measures, expand FTAs, invest heavily in R&D, and resolve land, labor, and skill bottlenecks.
Together, these actions will steer India into advanced manufacturing realms, embedding it securely in GVCs. They offer a shield against protectionist headwinds, such as potential Trump-era policies, ensuring enduring market strength.
The February 7, 2026, India-US pact emphasizes mutual market entry. India cuts tariffs on American industrial and agri-products like DDGS, red sorghum, nuts, fruits, soybean oil, and spirits. The US responds with 18% tariffs on Indian textiles, leather goods, plastics, chemicals, and machinery, with prospects for further reductions on pharmaceuticals, gems, and aviation components.
This deal aims to rectify trade imbalances from the US side while granting India competitive tariff edges—often below 18% effective rates against peers. It supercharges initiatives like Make in India and self-reliance drives, per official remarks.
Key wins include removing security-linked duties on planes and parts, plus auto sector quotas. Aviation and manufacturing stand to gain immensely, fortifying India’s economic armor for decades ahead.