• Source:JND
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India-US Trade Deal: The India-US trade deal, which has now been finalised after months of deadlock, will give a major boost to the Indian economy by unlocking the obstacles to the massive export opportunity.

Under the deal, which was announced by US President Donald Trump, the US will reduce the reciprocal tariff on Indian products to 18 per cent from 25 per cent.

The additional 25 per cent tariff, which was levied due to India's buying of Russian oil, will also be removed under the deal.

The announcement came as major relief for sectors that have major exposure to the US market, as they will now see an ease in their margins, and the deal will also increase their competitiveness.

Sectors Set To Be Benefited Most From The India-US Trade Deal

Textiles and Apparel

Highly price-sensitive segment (cotton garments, home textiles). Tariff cuts narrow the pricing gap, boosting competitiveness against low-cost manufacturing hubs like Bangladesh and Vietnam, particularly for large exporters in mid-value categories.

Chemicals And Pharma 

Exports of specialty chemicals and intermediates, which are governed by long-term contracts, benefit from lower tariffs that directly improve net realisations. This move strengthens India's position in US supply chains seeking diversification under "China-plus-one" strategies.

Gems and Jewellery

A high-value and highly competitive segment (cut and polished diamonds, gold jewellery). The reduction in tariffs (e.g., from 25% to 18%) lowers the landed cost of Indian jewellery exports, easing pressure on margins for US wholesalers and retailers.

Engineering Goods

The largest share of India’s merchandise exports is in auto components, industrial machinery, and electrical equipment. Lower tariffs are critical for single-digit margin operations, enhancing competitiveness against East Asian suppliers and improving pricing flexibility and negotiating power for long-term supply arrangements.

IT Sector

While software exports are covered under the services trade and not directly impacted by goods tariffs, the sector benefits significantly from improved market sentiment and a strengthened overall bilateral relationship with the US, its largest market.


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