US Tariff Cuts to 18% Spark Optimism Among Indian Medical Device Makers

In a late-night post on X, Prime Minister Modi said he was “delighted that Made in India products will now have a reduced tariff of 18 per cent.”

Indian medical device manufacturers are expressing renewed optimism after the United States agreed to cut tariffs on Indian goods to 18%, a move industry experts say could materially improve export competitiveness in a key global market.

The tariff reduction follows a phone call between Prime Minister Narendra Modi and US President Donald Trump, with both leaders confirming the development through posts on their official social media platforms.

In a late-night post on X, Prime Minister Modi said he was “delighted that Made in India products will now have a reduced tariff of 18 percent.”

The US President announced the agreement earlier on Truth Social, stating that the two countries had concluded a trade deal that would lower reciprocal tariffs on Indian goods from 25% to 18%. Trump also said India would move to reduce tariffs and non-tariff barriers on US products to zero.

However, industry executives familiar with the negotiations said the effective tariff burden on Indian exports had been as high as 50% earlier, making the reduction to 18% more substantial than initially indicated.

MedTech industry representatives described the development as a significant shift for Indian manufacturers, particularly at a time when global supply chains are diversifying under the China+1 strategy. Rajiv Nath, Forum Coordinator of the Association of Indian Medical Device Industry (AiMeD), said the tariff cut would provide Indian medical device exporters with a clear advantage. He noted that the revised rate places India below China’s base export tariff levels, improving India’s relative cost position in the US market.

Before the introduction of reciprocal tariffs by the Trump administration, Indian medical devices entering the US were not subject to duties. Last year, the US imposed a 25% tariff on Indian goods, along with an additional 25% levy linked to Russian energy purchases, sharply increasing costs for exporters. In contrast, medical device imports into India typically attract basic customs duties ranging between 0% and 7.5%.

The US tariff reduction comes shortly after India concluded a trade agreement with the European Union, under which duties on medical devices were cut from 27% to zero. Industry observers believe the EU deal may have strengthened India’s negotiating position with other major trading partners.

According to data from the Exports Promotion Council of Medical Devices, India exported medical devices worth $714.38 million to the US in FY 2023–24, while imports from the US stood at $1.52 billion, underscoring the trade imbalance the sector has been seeking to address.

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