Cheer for exports: Textiles, carpets, leather set to gain after India-US deal

NEW DELHI: While details are still trickling in, the announcement of the India-US trade deal couldn’t have come at a more opportune time. Having just dispatched containers for the summer season, garment and leather and footwear makers were worried about orders for the next season.

The smaller players had virtually stopped shipments over the last few months and the bigger ones, with deeper pockets, were sustaining it thanks to steep discounts that they were offering even as their US buyers too were taking a small hit.




With the trade deal announced, Indian goods are suddenly looking more competitive. This means that a product will face 18% additional tariff over the MFN or product-specific rate.

At 18%, the levy on Indian garments will be marginally lower than the 20% faced by those made in Bangladesh or Sri Lanka.

Similarly, Indian carpets, which had lost significant market share, will now be competitive against those shipped from Turkey, while shrimps will be more affordable in American stores. Even gems and jewellery exporters can heave a sigh of relief as they had lost their competitive edge.

With levies on several Chinese products at 34%, Indian goods will have a slight edge.

Some of the sectoral tariffs such as those on auto parts and metals will, however, stay.

Businesses are, however, awaiting full clarity on the terms of the trade deal given that there is no joint statement at the moment and the claims made by US President Donald Trump on his social media account have not been fully responded to by Indian authorities.

With India having signed trade deals with the UK and the European Union, businesses will be able to rebalance their portfolios better by diversifying thee export destinations and hedge against flip flops by Trump in future.

India’s exports to the US have risen 11.3% to $59 billion between April and Nov led by doubling of smartphone shipments to $16.7 billion. Frontloading of exports to beat the tariff deadline, which kicked in from Aug has also aided exports during this period. Besides, nearly 40% of India’s exports including electronics and pharma were not impacted by the tariffs.

Deal unlocks power of 2 democracies: Goyal

A big day for India-US relations as the trade deal has been locked with a significantly reduced tariff of 18%, paving the way for stronger trade ties and mutual growth… This historic deal will elevate our strategic partnership and greatly benefit both nations and their people. Business between India and US set to flourish further,” Union home minister Amit Shah posted on X.

Commerce and industries minister Piyush Goyal said the deal “unlocks the power of two large democracies working together for shared prosperity of their people. Both India and US are natural allies and our partnership will co-create technologies, co-develop solutions, and work together for peace, growth, and a brighter future for India and the US”.

“US and India have complementary strengths. Both countries can co-create technologies and co-develop solutions that will benefit the world. Trade deal between US and India will lead to brighter future for both countries. India-US trade deal is a win-win deal. Citizens and industries of both countries will benefit greatly from this deal,” IT and I&B minister Ashwini Vaishnaw said.

Businesses were also upbeat. Aditya Birla Group chairman Kumar Mangalam Birla said: “The Aditya Birla Group is the largest Indian investor in the US, and we see this agreement helping shape more resilient supply chains, unlocking manufacturing opportunities and driving long-term economic competitiveness in both the US and India.”