New Delhi . The announcement of the trade agreement between India and the US comes at a time when Indian exporters, especially the textile, leather and footwear industries, were in deep trouble regarding future orders. After this agreement, Indian products will become more competitive in the American market. US President Donald Trump announced this deal after talks with Prime Minister Narendra Modi on Monday night.
Impact on these major industries
Textiles and Footwear: By now small exporters had almost stopped shipments and big players were somehow surviving by giving huge discounts. Now Indian garments will attract a tariff of 18%, which is lower than that of Bangladesh or Sri Lanka (20%).
Carpets: Indian carpets will now be able to compete strongly with the products coming from Türkiye.
Gems and Jewellery: Due to 34% tariff on Chinese products, Indian jewelery will now get an edge in the US market.
Marine Products: Many marine products, including Indian shrimp, will now be cheaper and more accessible in American stores.
IT Sector: America has reduced the tariff imposed on India from 25% to 18%. This will reduce the cost of Indian IT services and digital products, which will increase the competitiveness of Indian companies in the US market.
According to a Times of India report, tariffs on some sectors like auto parts and metals will remain the same as before. However, full details regarding this deal are still yet to come.
Export figures and current situation
Between April and November, India’s exports to America increased by 11.3% to reach $59 billion. The biggest role in this was played by smartphones, whose exports doubled to 16.7 billion dollars.
Interestingly, about 40% of India’s total exports (such as electronics and pharma) were not affected by these tariffs. Also, companies had already exported large quantities of goods to avoid the tariff deadline that came into effect in August.
Although there is an atmosphere of excitement, the business world is still waiting for complete clarity. No joint statement has been issued at present and a detailed response from Indian authorities on US President Donald Trump’s social media claims is yet to come.
India, which has already signed trade agreements with the UK and the European Union (EU), will now be able to diversify its portfolio, thereby reducing the risk of future US policy fluctuations.