US Tariff Reductions Set to Revive Indian Exports, Summer Bookings to Resume
With the United States implementing sharp tariff reductions and easing policy uncertainty, Indian exporters are preparing to resume shipments at the revised duty rates. Industry executives project that this strategic move could potentially double India's exports to the US market over the next four to five years, marking a significant turnaround for bilateral trade relations.
Immediate Impact on Labour-Intensive Sectors
Labour-intensive sectors are positioned to gain the most substantial benefits from the revised tariff regime. These include textiles and apparel, gems and jewellery, leather products, agricultural goods, seafood, pharmaceuticals, electronics, and chemicals. An executive from the Apparel Export Promotion Council, speaking anonymously, confirmed that summer shipment bookings will resume in the coming days as buyers return to the market.
Narendra Goenka, head of Mumbai-based textiles exporter Texport Industries Pvt. Ltd, emphasized that the new tariff structure will enable Indian textile exporters to scale up orders significantly. "Global buyers are actively seeking to diversify their sourcing strategies and secure long-term supply contracts, and India's improved cost advantage makes us an attractive partner," Goenka stated.
He further explained that with tariffs on competing nations like Bangladesh, Vietnam, and China remaining marginally higher, Indian exporters have a prime opportunity to capitalize on enhanced competitiveness and expand their market share in the United States. "The immediate gain will be the return of US buyers who had previously paused orders due to the 50% tariff. Sourcing shifts that were stalled by steep duties are now expected to move forward," Goenka added during a phone interview.
Gems and Jewellery Sector Eyes Major Recovery
Beyond textiles, the tariff relief is projected to have an even more pronounced impact on India's gems and jewellery sector, one of the country's largest export categories to the US. Vipul Shah, former chairman of the Gems & Jewellery Export Promotion Council and CEO of Asian Star, revealed that the sector anticipates a nearly 30% increase in total exports following an expected zero-tariff regime for gems and diamonds.
"With the trade deal finalized and significant relief from US tariff pressure, business conditions will improve substantially. We are hopeful that exports could double over the next couple of years," Shah commented. Data from the commerce ministry shows that gems and jewellery exports totaled $3.12 billion during April-November 2025, exactly half of the $6.3 billion recorded in the same period of the previous fiscal year. The sector had achieved exports of approximately $10 billion in the full fiscal year 2025.
Consumer-Facing Sectors to Benefit Significantly
In addition to manufacturing-heavy segments, consumer-facing industries such as seafood, Ayurveda, agriculture, and electronics are also expected to reap rewards from the tariff reductions. Vachaspati Tripathi, managing director of Varanasi-based Surya Pharmaceuticals, highlighted the substantial opportunity for Ayurveda formulations. "Lower duties will enhance price competitiveness, making Indian products more appealing to US buyers, particularly as demand for natural and traditional medicines continues to rise," Tripathi explained.
He noted that this tariff relief will enable companies to expand volumes, penetrate new retail channels, and strengthen their long-term presence in the American market. Commerce ministry data indicates that India exported herbal and Ayush products worth $689.34 million in FY25 and $651.17 million the previous year. Projections from the India Brand Equity Foundation suggest the Indian Ayush market could grow to $200 billion by 2030 from $40 billion in 2024.
Broader Economic Implications and Trade Data
Prabhat Kumar, chairman of Pan IIT Alumni India, pointed out that improved market access, alignment of standards, and reduction of non-tariff barriers will accelerate collaboration in ICT, electronics, and emerging technologies. "This development will help Indian firms integrate more deeply with US technology supply chains and attract higher-value investments over the medium term," Kumar stated.
According to the joint statement on the first tranche of the India-US trade deal, tariffs on all Indian goods have been reduced to 18% from the previous 50%. This 18% duty applies in addition to the existing Most Favored Nation tariff, which averages around 2.8%. Importantly, the overall tariff burden on Indian exports will now be lower than that faced by key competing countries including Bangladesh, Vietnam, China, and Thailand.
Government officials emphasize that the agreement will stimulate job creation, align trade expansion with employment generation, and support Washington's efforts to diversify supply chains away from China. Industry executives add that stronger access to the US market could encourage fresh investment, deeper integration with American value chains, and a gradual shift by Indian firms toward higher-value products.
Recent Export Performance and Trade Figures
In FY25, India's exports to the United States were led by electronics goods at $14.59 billion, followed by drugs and pharmaceuticals at $10.5 billion, textiles at $10.32 billion, and gems and jewellery at approximately $10 billion. Other significant export categories included organic and inorganic chemicals ($4.2 billion), marine products ($2.7 billion), leather goods ($948 million), rice ($392 million), and fruits and vegetables ($331 million).
Bilateral trade in goods between India and the US reached $131.84 billion in FY25, representing a 10.13% increase from the previous year's $119.7 billion. Indian goods exports to the US grew by 11.6%, rising from $77.52 billion in FY24 to $86.51 billion in FY25. Meanwhile, imports from the US saw a more modest increase of 7.42%, climbing from $42.20 billion in FY24 to $45.33 billion in FY25.
