Published: 6 February 2026Morgan LewisEconomy
India-US Trade Tariff Reduction Takes Effect; Reciprocal Tariff Drops from 25% to 18%
The revised US tariff rates on Indian imports officially took effect at 12:01 AM EST on February 7, 2026, as per the executive order issued on February 6. The IEEPA-based reciprocal tariff on India dropped from 25% to 18%, and the additional 25% tariff linked to Russian oil purchases was eliminated.
This represented a significant reduction from the peak 50% combined tariff rate that India had faced. Indian exporters in textiles, gems & jewellery, chemicals, and auto components stood to benefit immediately. Rajasthan's textile export hub in Bhilwara and gems & jewellery sector in Jaipur were expected to see improved competitiveness in US markets. The White House joint statement listed textiles and apparel, organic chemicals, certain machinery, gems and diamonds among categories affected by the tariff framework.
0Mains angle
Q: Examine the economic and political significance of the reduction of United States reciprocal tariff on Indian imports from 25 per cent to 18 per cent, effective 7 February 2026, for Indian exporters and Rajasthan's trade-linked sectors.
Answer (50 words):
Effective 12:01 AM EST on 7 February 2026, the IEEPA-based reciprocal tariff dropped from 25 to 18 per cent and the 25 per cent Russian-oil linked tariff was eliminated, easing the peak 50 per cent burden. Bhilwara textiles, Jaipur gems, chemicals and auto-components gain immediate competitiveness, FICCI welcomed.
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Practice MCQ from this story
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Linked questionMedium
What was the peak combined tariff rate India faced from the US before the trade deal reduced it?
Explanation · Correct answer CIndia faced a peak 50% combined tariff rate (25% reciprocal tariff + 25% additional tariff linked to Russian oil). The deal reduced the reciprocal tariff to 18% and eliminated the oil-linked tariff.
Frequently asked questions
When did the India-US tariff reduction take effect and what changed?
The revised US tariff rates on Indian imports took effect at **12:01 AM EST on February 7, 2026**, per an executive order issued on February 6. The **IEEPA-based reciprocal tariff dropped from 25% to 18%**, and the additional 25% tariff linked to Russian oil purchases was **eliminated entirely**.
Which Indian export sectors benefited from the US tariff reduction in February 2026?
Indian exporters in **textiles, gems & jewellery, chemicals, and auto components** stood to benefit immediately. Rajasthan specifically benefited through its **textile export hub in Bhilwara** and **gems & jewellery sector in Jaipur**.
What was India's peak combined tariff rate from the US before February 2026?
India had faced a **peak combined tariff of 50%** from the US, comprising the 25% IEEPA-based reciprocal tariff plus the additional 25% tariff linked to Russian oil purchases. Both were reduced/eliminated in February 2026.
What is the IEEPA and how did it relate to India-US tariffs?
The **International Emergency Economic Powers Act (IEEPA)** is a US law allowing the president to regulate commerce during a national emergency. The Trump administration used it to impose **reciprocal tariffs** on countries including India, which were reduced from 25% to 18% in February 2026.
How did India-US tariff reduction help Rajasthan's economy?
Rajasthan's economy directly benefited as the tariff reduction helped its **textile export hub in Bhilwara** and **gems & jewellery sector in Jaipur** gain competitive advantage in the US market, boosting export revenues for these key Rajasthan industries.
