US-India Trade Deal Revives Bengal's Export Sector with Major Tariff Cuts
The formal announcement of the interim trade agreement between the United States and India has delivered a significant wave of relief to exporters across West Bengal. After months of virtual standstill in negotiations with American buyers, key export sectors are now poised for a robust resurgence. Industries with substantial ties to the US market, including leather, engineering, garments, marine products (primarily shrimp), tea, and jewellery, are expressing renewed confidence that business activities will swiftly resume.
Substantial Tariff Reductions Across Key Industries
For the tea and gems & jewellery sectors, the deal represents a "double bonanza" as tariffs have been completely eliminated, dropping to 0%. For other critical sectors, the tariff rate has been dramatically reduced to 18% from a staggering previous high of 50%. This substantial reduction is expected to immediately enhance the competitiveness of Indian goods in the lucrative American market.
Before the imposition of penal and reciprocal tariffs of 50% by former US President Donald Trump, exports from Bengal to the United States were valued between Rs 17,500 crore and Rs 18,000 crore annually. This included engineering exports worth approximately Rs 8,000 crore, leather at Rs 1,200 crore, shrimp and seafood at Rs 6,000 crore, gems & jewellery at Rs 2,000 crore, and garments ranging from Rs 450 crore to Rs 500 crore.
Sector-Specific Impacts and Optimistic Outlooks
Gems and Jewellery: Jewellers in Kolkata, who export a variety of items to the US, were particularly relieved by the announcement of zero-duty access for diamonds and coloured gemstones under the Interim Agreement framework. The duty on finished jewellery was also significantly reduced from 50% to 18%. "This is a substantial relief for jewellery exporters in Kolkata and across Bengal," stated Pankaj Parekh, chairman (East) of the Gems and Jewellery Export Promotion Council.
Tea Exports: Rudra Chatterjee, Managing Director of Luxmi Group, highlighted that the United States is a critical market where India exports its highest-value teas, including the renowned Darjeeling varieties. The zero-duty access for both bulk and value-added tea presents a golden opportunity for India to scale up branded exports rather than merely selling loose leaf. Notably, Bengal accounts for a major portion of the approximately Rs 600 crore in tea exports from India to the US. Bijay Gopal Chakraborty, president of CISTA, firmly believes that the India–US interim trade deal will definitely boost the Indian tea export market, especially for premium and branded products.
Engineering Sector: The only unresolved factor remains Section 232, which imposes higher tariffs on steel and aluminium materials that constitute a large portion of engineering exports. However, exporters are optimistic that this issue, too, will be resolved in the near future. Sanjay Budhia, Managing Director of Patton, one of the leading engineering exporters, remarked, "For Bengal, with its strong engineering base, this agreement may create incremental opportunities in the near future. Effective implementation will be key to translating this potential into sustained growth."
Restoring Confidence and Anticipating Growth
Seafood and Garments: Rajarshee Banerjee, a board member of the national managing committee of the Seafood Exporters' Association of India, noted that the deal "will bring buyers and sellers back to the table," facilitating renewed trade discussions. In the garment sector, Abid Ali Ostaghar, who operates a factory in Metiabruz, emphasized that the agreement has reduced uncertainty. "For the last few months, exporters were hesitant and kept delaying orders. Now, at least the rules are clear. We are hopeful that business will improve steadily in the coming months," he explained.
Leather Industry: At the Bantala Leather Complex, where manufacturers of gloves and accessories cater largely to overseas markets, there is palpable optimism. One manufacturer indicated, "If this positive trend continues, I may need to hire additional personnel to meet upcoming deadlines and increased demand."
The interim trade deal marks a pivotal moment for Bengal's export economy, promising to rejuvenate trade flows, restore business confidence, and potentially lead to job creation and economic growth across multiple industries. Exporters across the state are now preparing to capitalize on the newly favorable conditions, aiming to reclaim and even surpass previous export volumes to the United States.
