Even as India and US officials held negotiations over the past year to seal a trade deal between the two sides, the Indian government has taken several steps to focus on making the Indian economy resilient and future-ready.
The trade deal announcement was first made late Monday by US President Donald Trump, who said that Prime Minister Narendra Modi agreed during a phone call to stop buying Russian oil. (PTI/File)
The trade deal announcement was first made by US President Donald Trump, who said that Prime Minister Narendra Modi agreed during a phone call to stop buying Russian oil. Modi, without using the term “trade deal”, thanked President Trump “on behalf of the 1.4 billion people of India” for the “wonderful announcement” of slashing tariffs from 25 per cent to 18 per cent. Track India-US trade deal live updates
In total, the moves will reduce the overall levies on many Indian goods from 50 per cent to 18 per cent. Trump had in August last year imposed tariffs in two phases on India, 25 per cent first and as much later as “penalty” for buying Russian oil.
The India-US trade deal, which home minister Amit Shah and others in the central government confirmed apart from Trump, follows months of negotiations that involved meetings in both New Delhi and Washington and phone calls between PM Modi and the US President.
How India focused on resilient economy
-A Budget boost: The latest development to increase the competitiveness of the Indian economy in the international market came with the Union Budget when labour-intensive industries such as textiles, seafood, footwear and leather goods received a boost. After the Trump administration’s levies came into force in August, exports of Indian fish and other aquatic invertebrates fell by 9.2 per cent on an annualised basis. Exports of Indian knitted apparels also dipped by 3.88 per cent to $1.70 billion.
“I propose to increase the limit for duty-free imports of specified inputs used for processing seafood products for export, from the current one per cent to three per cent of the FOB value of the previous year’s export turnover,” finance minister Nirmala Sitharaman said in her Budget speech on Sunday. “I also propose to allow duty-free imports of specified inputs, which is currently available for exports of leather or synthetic footwear, to exports of shoe uppers as well,” she added.
Union commerce and industry minister Piyush Goyal called it a Budget for “future-ready Bharat” that would see a jump in exports and domestic manufacturing. “With a dedicated focus on accelerating manufacturing growth, boosting exports & positioning India as an attractive investment destination, the Budget reinforces the nation’s role as a trusted global economic partner,” he said in a post on X.
-Labour codes come into effect: In November last year, the government announced that the four labour codes – the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 – were being brought into effect. It said that modernising labour regulations laid the foundation for a future-ready workforce and stronger industries driving labour reforms for ‘Aatmanirbhar Bharat’.
Many of India’s labour laws were framed in the pre-Independence and early post-Independence era (1930s–1950s), at a time when the economy and world of work were fundamentally different, the government said in November. It consolidated 29 labour laws into these four comprehensive labour codes. The long-pending reforms took India beyond colonial-era structures. In the international market, labour standards, regulatory clarity, and workforce flexibility increase the competitiveness of the economy, even as some of these issues were discussed during negotiations between India and the US.
-Quality Control Orders: Another major development was linked to Quality Control Orders (QCOs), which affect India’s exports and imports as well as market access. QCOs mandate compliance with Indian standards for certain products, which the government views as a way to ensure quality, protect consumers, and support domestic manufacturing. In a move to help the textile sector, which is among those that were hit due to the US tariffs, the ministry of chemicals and fertilizers in November 2025 rescinded 14 QCOs, including polyester fibre and polyester yarn with immediate effect. Trading partners such as the US often see stringent or rapidly imposed QCOs as potential non-tariff barriers that can raise compliance costs and restrict imports. QCOs, as a result, have chances of coming up in trade discussions and any relaxation in those potentially shape the practical terms of trade even though they are not explicit clauses in a bilateral trade agreement.
While details of the India-US trade deal are yet to be formally released by the Indian government, the timing of changes related to labour codes and Quality Control Orders – both of which have historically featured in trade discussions between the US and its partners – suggest that these measures may have contributed to the broader negotiating environment.