With the nation’s exports to the US already at $86.35 billion in 2024, the deal is expected to turbocharge growth across textiles, leather, gems and jewellery, pharmaceuticals, home décor, machinery and technology-led industries.
However, at the heart of the trade pact lie significant tariff advantages.
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New Delhi has locked in a competitive tariff rate of 18% on nearly $900 billion worth of US global imports, zero-duty access on $150 billion, and exemption from additional duties on another $720 billion. Preferential treatment has also been granted on 232 tariff lines, while exemptions continue on imports valued at about $350 billion.
For Indian exporters specifically, the deal addresses the $40.96 billion of exports that previously faced reciprocal tariffs as high as 50%.
Under the new framework, tariffs on $30.94 billion of these goods have been slashed to 18%, while another $10.03 billion now enjoy zero-duty access. This restructuring creates a decisive advantage over competitors like China with 35% tariffs, and Vietnam and Bangladesh that were slapped with 20% tariffs by Donald Trump.
Big wins for textiles, machinery and agriculture
Textiles and apparel emerge as clear winners, with Washington’s tariffs slashed from peaks of 50% to 18%, giving Indian manufacturers a decisive cost advantage.
Silk products have gone a step further, securing zero-duty access to a $113-billion US market and opening the door to rapid expansion in a high-value segment.
Meanwhile, machinery and engineering exports are also set for a lift, with tariffs cut to 18% in a market estimated at $477 billion.
The lower duties are expected to help Indian companies scale up exports of industrial equipment and capital goods, sectors seen as key to long-term export growth. With India’s current exports in this segment at USD 2.35 billion, the lower duties will help Indian companies scale up exports of industrial equipment and capital goods.
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Additionally, the agreement secures zero additional duty access for industrial exports valued at $38 billion, covering aircraft parts, generic drugs, and elementary auto parts.
Agricultural exports have not just not been left behind, but given a hot seat.
About $1.36 billion worth of Indian farm exports will now enter the Trump-led global power with zero additional duties. Within this, products valued at $1.035 billion have been specifically assured zero reciprocal tariffs to provide long-term stability.
Staples such as spices, tea, coffee, fruits, nuts, and processed foods will enjoy duty-free access, strengthening India’s presence on American shelves.
At the same time, highly sensitive sectors remain fully protected.
Categories including dairy, meat, poultry, cereals, millets, and oilseeds are placed under an exemption category to preserve domestic interests and the livelihoods of Indian farmers.
Growth in gems, jewellery, and home décor
In the gems and jewellery sector, tariffs have been reduced from 50% to 18% for a $61-billion market.
Furthermore, 0% duty access was secured for major categories like diamonds and platinum, covering a $29-billion segment.
Home décor also benefits significantly, with tariffs dropping to 18% for a $52-billion market and 0% duty access granted for $13 billion worth of products including chandeliers and seats.
Digital Trade Partnership
India has consolidated its position as the 5th largest global exporter of digitally delivered services, with exports reaching $0.28 trillion in 2024—a 10.3% year-on-year growth.
The agreement reduces regulatory uncertainty and lowers compliance friction for cross-border service delivery.
It also facilitates access to advanced semiconductor chips, AI chips, and high-performance processors necessary for the Digital India initiative and the expansion of domestic data centers.
Empowering MSMEs and small biz
On the other hand, a carefully calibrated framework has been established to safeguard India’s MSMEs and production clusters.
In the toy sector, tariffs have been reduced from 50% to 18% for an $18-billion market, allowing MSMEs to scale production and integrate into global supply chains.
Similarly, the labor-intensive leather and footwear industry, which supports many small businesses, gains improved access to a $42-billion market through an 18% tariff cap.