Indian exporters stand to gain in well over half of the products exported to the US, under the new tariff structure for countries imposed by the world’s largest economy.
Indian firms are better placed to increase their share in the US imports of $2.29 trillion in product lines where they now have a tariff advantage compared with their main competitors, according to Niti Aayog’s latest Trade Watch report.
These estimates are based on the tariff levels as on July 10, when India suffered the additional baseline tariff of 10%, and many other countries, including China were subjected to relatively higher tariffs.
The think tank’s report noted that at the HS (harmonised system) two-digit level, out of 30 products that have 91.4% share in India’s total exports to the US, India could gain in 22 products under the new tariff structures imposed by US.
These 22 products have a share of 61% in India’s exports to the US ($49.3 billion out of the total export of $81 billion in FY25). The share of these products in the total US imports from all countries is estimated to be a substantial 68% or $2.29 trillion, indicating the wide scope for Indian exporters.
In six products, out of the 30 reviewed, which have a share of 32.8% ($26.5 billion) in India’s exports to the US, the status quo might remain as India faces a slightly average tariff of 3%.
“More notably, India enjoys a competitive edge over China in several key sectors. The average tariff differential between Indian and Chinese exports is 20.5% in India’s favour. By leveraging its comparatively lower tariff burden, especially in contrast to China, India is well-positioned to gain market share,” the Niti report said.
Meanwhile, HS 4-level analysis offers a more granular view, identifying 78 products with potential gains, with the share of these exports to the US (where India can gain) at 52% ($42 billion). These products account for $873 billion in US imports, where India is going to be much better off.
“So, in the majority of the products at the HS two-digit level and HS four-digit level, India is going to be more competitive in the US market. It (current tariff structure) gives opportunities of more than $2.2 trillion of market at the two-digit level and close to $900 billion of market at the four-digit level, where India is going to get better now,” Pravakar Sahoo, Programme Director, NITI Aayog, said.
India is currently negotiating a bilateral trade agreement (BTA) with the US to gain more market access in labour-intensive as well as technology-driven sectors. The first tranche of the agreement may be signed before fall this year. An interim understanding may be reached on the broad contours of the deal soon, while Indian negotiators are firm on protecting the sensitive areas of the farm economy.
In the analysis, Niti Aayog report has factored in the US’s 10% additional baseline tariff on imports from all countries except Mexico and Canada. Further, the latest tariff imposed on other countries as on July 10, 2025 have been considered. Imports from Mexico and Canada are subject to a higher tariff of 25% and 35% respectively, while imports from China face an additional higher tariff of 30%.
India’s competitiveness is enhanced due to higher tariffs on competitors, particularly in sectors like minerals, fuels, apparel, electronics, plastics, furniture, and seafood, Sahoo said.
“With the shared objective of reaching $500 billion in bilateral trade by 2030 and ongoing efforts toward a comprehensive BTA, the India-US trade corridor is poised for further expansion,” the report noted.
In 2024, India’s bilateral trade (merchandise) with the US reached $123.8 billion, with a trade surplus of $37.7 billion for India. The US remains India’s largest export market, accounting for 18.3% of total exports. From 2016 to 2024, India’s exports to the US grew at a 7.5% CAGR, surpassing the global export growth rate. Despite global disruptions, including the pandemic, exports to the US nearly doubled from $42.7 billion in 2014 to $80.8 billion in 2024, highlighting the US’s strategic importance to India’s export growth.