An interim trade framework between India and the US lowers the US “reciprocal” tariff on Indian goods to 18% from as high as 50% earlier, a move expected to improve Indian exporter’s price competitiveness in the US market. The framework could open a large market opportunity for Indian exporters, including MSMEs, fishermen, and farmers.
Sectors likely to benefit from the India-US trade deal
Textile and apparel: With the US a major destination, tariff relief can boost competitiveness. About 32% of India’s textile exports go to the US and exporters like Arvind, Gokaldas Exports, KPR Mill, Welspun Living and Indo Count Industries can be beneficiaries, as per NDTV.
Gems & Jewellery/Diamonds: The lower landed costs can ease margin pressure and inventory movements in the segments. Gems and diamonds are among the products where tariffs could be lowered sharply under the new framework. Titan is among the companies investors are closely watching.
Leather & footwear, Chemicals, plastics, home decor, artisanal products, rubber, and select machinery: These categories are likely to see expanded market opportunity under the new deal. The lower tariffs can boost realisations and strengthen India’s supply-chain positioning in chemicals.
Fisheries: As per NDTV report, the US accounts for around 48% of India’s shrimp exports and says tariff cuts could support players like Apex Frozen Foods, Avanti Feeds, and Coastal Corporation.
Positive for IT sector: Tariffs don’t directly impact Indian IT companies because software exports are classified as services,not goods. Still, warmer trade ties between India and US and a positive outlook for the US market can support sentiment around Indian IT companies.
Generic pharmaceuticals : A wide range of goods could witness tariffs fall sharply, including generic pharmaceuticals and , subject to agreed conditions and implementation. The Joint statement mentions that the US may remove the reciprocal tariff on generic pharmaceuticals as listed in the “Potential Tariff Adjustments” annex subject to successful conclusion of the interim agreement. It also mentions that the outcomes on generic pharmaceuticals and ingredients are contingent on findings of a US Section 232 investigation.
Aircraft parts: The joint India-US statement mentions that aircraft parts for reciprocal-tariff removal (subject to the conclusion). It also said that the US will remove certain tariffs on aircraft/aircraft parts from India under specific Section 232-related proclamations.
Sectors that could face pressure or mixed reactions:
Import-competing manufacturing: Under this come industrial goods, ICT hardware and medical devices. India will reduce tariffs on US industrial goods and address non-tariff barriers, including long-standing issues affecting US medical devices, and ease restrictive import licensing for ITC goods, as reported by Reuters. These steps can increase competition for domestic markets.
Auto/auto components: Exporters may benefit, but some components may still face higher effective tariffs, and auto stocks were volatile amid competitive concerns. India is also set to receive a preferential tariff-rate quota for automotive parts subject to the national -security tariffs, as per the joint statement.
Agriculture and dairy: India has protected sensitive items, including major cereals and dairy products, but it has also lowered barriers on a wide range of US foods and agricultural products.
The Indian-US trade deal also includes India’s intent to purchase $500 billion of US energy, aircraft/parts, precious metals, technology products and cooking coal over five years, plus expanded trade in tech products including data centres and GPUs.