The India-US Interim Trade Agreement Framework, announced on February 6, 2026, following talks between PM Narendra Modi and President Donald Trump, reduces US tariffs on certain Indian goods from 25% to 18% (earlier it was higher with additional duty). Indian Chemical Council (ICC) President Ramya Bharatharam called this step a big positive step for the chemical sector.
Bharatharam said high tariffs have harmed Indian competitiveness “to a great extent”. Reduction in duty to about 18% has brought India closer to Asian competitors (18–19%), thereby increasing exports. “Both organic and inorganic chemicals will directly benefit,” he said, adding that better market access will increase exports.
Chemical-dependent industries—textiles, agriculture, electronics, semiconductors, leather, and pharmaceuticals—get indirect benefits through improved overall access.
This framework includes eliminating/reducing tariffs on US industrial goods and certain agricultural/food products from India (e.g., dried distillers grains, soybean oil, tree nuts, wine/spirits). The US imposes 18% reciprocal tariff on Indian categories such as textiles/clothing, leather/footwear, plastics/rubber, organic chemicals and machinery, and may be removed for generics/pharma, gems/diamonds and aircraft parts if finalized. Non-tariff barriers will also be removed.
India secured protection for sensitive sectors like farming and dairy, thereby avoiding opening up of the entire market amid farmers’ concerns. The mega bilateral trade agreement aims to double bilateral trade from ~$191 billion to $500 billion by 2030.
The chemical industry sees this as a “very positive” step, and is awaiting final details to see the full impact.
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