New Delhi is at a crossroads in its economic journey. A fresh report underscores that to secure a competitive advantage over the long haul, India needs to prioritize trade liberalization and structural reforms. This comes amid the interim India-US trade pact, signaling a pivotal shift in global commerce dynamics.
The comprehensive analysis from Systematics highlights key imperatives. India must rectify inverted duty structures that inflate raw material costs. Streamlining logistics and customs procedures is crucial to slash expenses further. Promoting assembly-based manufacturing will unlock large-scale production and job creation. Beyond this, reducing protectionism, forging more Free Trade Agreements (FTAs), bolstering Research and Development (R&D), and easing hurdles in land, labor, and skills are non-negotiable.
This multifaceted strategy promises to propel India toward advanced manufacturing. It will integrate the nation more firmly into Global Value Chains (GVCs), mitigating risks from stringent trade policies like those under Donald Trump. The report envisions sustained competitiveness through these measures.
Under the India-US bilateral deal signed on February 7, 2026, both nations commit to equitable market access. India agrees to slash or eliminate tariffs on US industrial goods, food items, and agricultural products including Distillers Dried Grains with Solubles (DDGS), red sorghum, nuts, fruits, soybean oil, liquor, and spirits.
In reciprocity, the US sets an 18% duty on select Indian exports like textiles, apparel, leather, plastics, chemicals, and machinery. Successful implementation could lead to duty waivers on generic drugs, gems and jewelry, and aircraft parts.
From Washington’s perspective, this framework balances trade and removes market barriers. For India, it delivers tariff relief, capping effective duties on its products at 18% in the US—lower than many rivals. Commerce Minister statements affirm boosts to employment-intensive sectors, Make in India, and Atmanirbhar Bharat initiatives.
National security-based duties on aircraft and parts will lift, alongside special quotas for auto components. This catalyzes growth in aviation and manufacturing, positioning India as a global powerhouse.