Goyal-Greer Talks: Is Lower US Tariff Enough To Lift India’s Exports?

Commerce and Industry Minister Piyush Goyal’s visit to the United States comes at a crucial stage in India-US trade negotiations, with New Delhi seeking a tariff rate that gives Indian exporters an advantage over competing economies. But even if India secures preferential treatment, a lower tariff may not automatically translate into higher exports.

Goyal is visiting the US from September 29 to October 5 and is scheduled to hold talks with US Trade Representative Jamieson Greer alongside the G20 Trade Ministers’ meeting.

The Commerce Ministry has said the discussions will focus on advancing the India-US Bilateral Trade Agreement (BTA) and finalising an interim deal.

Lower Tariff Is Only The First Step

The February 2026 India-US framework envisaged an 18% reciprocal tariff on originating Indian goods, while also providing for the removal of the reciprocal tariff on a range of products.

However, subsequent US tariff measures have changed the landscape, with a separate 10% duty imposed due to forced-labour scrituny on a broad set of Indian exports from July, as per a report by Reuters.

Goyal has said India wants terms that provide a competitive advantage over its rivals.

"As soon as the US is able to give us the preferential rate in comparison to our competition, we will finalise the bilateral trade agreement and announce the final details," Goyal said on September 3, as per a report by Bloomberg (BBG).

The commerce minister added that India was looking at the tariff treatment available to countries such as Vietnam and Bangladesh and wanted better rates, the report said.

Yet the tariff is only one component of the final cost of getting an Indian product into the US market.

The Non-Tariff Costs India Still Faces

A lower US tariff could make Indian products more competitive, but the final cost of exporting depends on more than the customs duty. Indian exporters also face regulatory checks, documentation requirements, testing and certification procedures, quarantine norms and other compliance-related costs, which can add both expense and delays.

NITI Aayog has identified these non-tariff measures as a constraint on export expansion, particularly because they can increase compliance costs for exporters.

"A key constraint to export expansion is the rise in non-tariff barriers (NTBs) across developed and developing markets. Indian exporters face diverse regulatory checks, quarantine norms, and documentation requirements, resulting in higher compliance costs and delays," NITI Aayog said in a quarterly trade report published in January 2026.

"Examples include stringent vehicle quarantine regulations in Australia, customs-related bottlenecks in Sri Lanka despite localisation mandates, and varying regulatory standards across ASEAN economies," it added.

The India-US trade framework therefore goes beyond tariffs. It includes commitments to address non-tariff barriers, discuss standards and conformity-assessment procedures, and establish rules of origin so that the benefits of the agreement accrue predominantly to India and the US.

For Indian exporters, this means the commercial benefit of any preferential tariff will depend partly on whether their products can meet the applicable US standards, testing and certification requirements and qualify for preferential treatment under the agreed rules of origin.

The US Trade Representative has termed these as "Technical Barriers to Trade" as procedures such as testing and certification used to determine whether products meet applicable standards or regulations. These requirements can therefore become an additional consideration for exporters even when the customs tariff is reduced.

This is why the impact of Goyal's negotiations cannot be measured by the tariff rate alone. A preferential tariff can lower the cost of entering the US market, but Indian exporters still need to overcome the regulatory, compliance and supply-side costs that determine whether that advantage translates into actual orders.

Textiles Show The Challenge

Textiles offer a clear example of why a preferential tariff does not automatically translate into higher exports. According to India's Ministry of Textile, the US is already India’s largest market for textiles and apparel, with exports worth about $10.5 billion, while the US imports roughly $118 billion of these products globally.

That leaves significant room for India to increase its share, but competing for those orders depends on more than the tariff rate. Indian exporters also compete with suppliers from countries such as Bangladesh, Vietnam, Cambodia and Indonesia, where differences in tariffs, sourcing arrangements, production costs and supply-chain capabilities can influence buyers’ decisions.

According to a report by Reuters, the Confederation of Indian Textile Industry in July estimated India's annual textile and apparel exports to the US at nearly $11 billion, while Bangladesh, Indonesia and Cambodia also have substantial US markets and could benefit from preferential arrangements involving US-origin cotton.

The question for Goyal’s negotiations, therefore, is not simply whether India can secure a lower tariff than its rivals. It is whether that advantage is large and durable enough to persuade global buyers to shift more orders to Indian suppliers.

Without improvements in scale, turnaround times, input costs and market access, a better tariff may improve competitiveness without necessarily producing a proportionate increase in export volumes.

The Real Test Is Market Share

For India, the real test of a preferential tariff will be whether it translates into a larger share of the US market.

According to the US Trade Representative Office, US goods imports from India rose 18.9% to $103.8 billion in 2025.

That makes the outcome of the trade talks measurable beyond the headline tariff rate. If Indian exporters gain a meaningful cost advantage over competing suppliers, the key question will be whether US buyers respond by placing more orders with India.

For Goyal's negotiations, the distinction is important: a preferential tariff can open the door, but exporters still have to win the order.

A sustained rise in India's share of US imports would provide a clearer indication that the preferential tariff is translating into greater export competitiveness, rather than merely improving the terms for shipments that Indian companies are already making.