The US and India reached a trade agreement that lowers US tariffson Indian goods to 18% (from 50%). India also agreed to stop purchasing Russian oil. Expect improved competitiveness forIndia-origin exports (notably textiles/apparel), potential volume recovery into the US East Coast, and shifting carrier capacity andrate dynamics as demand stabilizes.
The US and India announced a trade agreement following amonths-long dispute that had driven US tariffs on Indian goods up to50% last August. Under the new deal, Washington will cut tariffs to18%.
A central element of the agreement is India’s commitment to stop buying Russian oil. The US also said it would remove a separate 25% punitive tariff tied to those Russian oil purchases, while lowering the “reciprocal” tariff rate to 18%.
Lower tariffs immediately improve landed-cost math forIndia-origin goods into the US—especially product categories like textiles and apparel—making them more competitive versus other Asian sourcing markets. For procurement and supply chain teams, the near-term implication is renewed optionality in sourcing strategies that had been constrained by tariff volatility.
Many shippers have pursued diversification for resilience—but tariff shocks can still rapidly swing routing and sourcing decisions. This deal is a reminder that geopolitics and trade policy can be as decisive as labor cost or lead time when designing a sourcing portfolio.
The dispute materially reduced India-to-US East Coast (USEC) containerized imports. According to PIERS data cited in the article,volumes fell 32% from 93,160 TEUs in August to 63,590 TEUs in December. (The chart on page 3 visualizes the sharp year-over-year deterioration.)
On the pricing side, the Platts India Subcontinent–USEC spotrate dropped from $2,640/FEU on Aug. 1 to $1,212.50/FEU as of Jan.30—down 54%. (See the down trend chart on page 4.)
The article notes carriers used blank sailings (blank calls) tomanage supply-demand balance as demand softened, but rate increases failed to stick due to weak support. If volumes rebound on policyclarity, carrier network decisions (restoring sailings, equipment positioning, and space allocation) will be a key leading indicator.
Revisit total landed cost models and confirm how the 18% tariff level changes supplier economics, duty exposure, and pricing strategy.
Details such as the implementation timeline were not immediately available, so import recovery may lag the announcement. Build scenarios and track weekly booking signals.
A policy-driven demand rebound can tighten capacity faster than shippers expect—especially if carriers keep a disciplined stance onsailings.
If India becomes more cost-competitive, anticipate re-optimization across vendor allocation, compliance workflows, and origin planning.
For global shippers, this development sits at the intersection of trade policy, geopolitics, and freight-market cyclicality. The most practical next step is operational: align procurement decisions with forward capacity planning—so cost savings (tariffs) don’t get partially offset by service disruptions, equipment constraints, orabrupt rate swings.
