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The India-US trade agreement reduces US reciprocal tariffs on Indian goods from 50% to 18% and this is becoming a significant catalyst for India’s export-oriented sectors. The move restores India’s competitiveness against Asian peers.
The August 2025 tariff increase of 50% created major economic impacts on various industries through its effect on Indian exports to the United States.
Indian exporters now achieve pricing equality with their regional competitors since the current tariff rates have decreased.
Nearly 32% of India’s textile exports are directed to the US, making the sector particularly sensitive to trade disruptions.
With tariffs reduced to 18%, Indian textile exports are once again competitive against suppliers from Bangladesh, Vietnam, and other Asian nations.
Listed players such as Gokaldas Exports, Arvind, KPR Mill, Welspun Living and Indo Count Industries are expected to see improved order inflows and margin stability.
The US accounts for roughly 48% of India’s shrimp exports. This is why it is the most critical market for seafood exporters.
Export volumes earlier dropped sharply following the tariff hike and shipments declined 15% year-on-year to 201,501 tonnes during April-November of the current fiscal.
With tariffs now lowered, industry bodies expect exports to rebound toward prior levels.
The gems and jewellery sector was among the hardest hit, with exports to the US contributing about 25% of sector revenues.
Elevated tariffs, coupled with weak natural diamond demand and rising competition from lab-grown diamonds, compressed margins and extended working capital cycles.
The tariff cut could provide partial relief especially for organised players expanding their US footprint.
The tariff reduction should improve cost competitiveness and revive sourcing discussions, particularly for firms without overseas manufacturing bases.
In chemicals, annual exports to the US of around $4 billion could stabilise, especially for agrochemical producers that compete directly with Chinese suppliers.
The rupee strengthened over 1% to 90.40 per dollar, while benchmark bond yields eased to 6.72%, indicating that investor confidence had improved.
The trade deal is now seen as a permanent benefit to India, which will increase its export capacity as geopolitical ties and supply partnerships are growing.
