New Delhi – India’s exports of pharmaceuticals, textiles, and gems and jewellery to the United States are expected to receive a boost under a bilateral trade agreement (BTA) likely to be signed by September–October this year, according to a report by Crisil released on Monday.
While the United States is already India’s largest export destination, the report suggests there is still considerable untapped potential in sectors such as smartphones, select pharmaceutical products, and labour-intensive goods like apparel and jewellery.
However, the report also cautions that Indian markets should prepare for a rise in imports from the U.S., given India’s relatively higher tariff structure. The agreement is expected to ease tariff barriers, which would make it easier for U.S. exporters to access the Indian market. This, in turn, could reduce India’s goods trade surplus with the U.S.
Post-agreement, India is expected to import more energy products, defence equipment, and certain agricultural goods from the U.S., the report notes.
While many of India’s top exports to the U.S. are already duty-free, the BTA may not lead to a dramatic surge in exports. This is partly due to continued U.S. efforts to reduce its trade deficit with India. The extent to which Indian goods can compete in the U.S. market will also depend on how India’s tariffs compare with those of competing nations.
The Crisil report underlines the vast scope for growth: in 2024, the U.S.—the world’s largest economy and importer—recorded $3.36 trillion in goods imports, compared to $2.59 trillion for China and $1.43 trillion for Germany. Yet, India’s share of U.S. imports was only 2.7 per cent.
To identify areas for export growth, the report examined India’s top 25 export categories to the U.S. Items like diamonds, seafood, and bed linens already have a strong presence, while others—such as smartphones and certain pharmaceutical products—show room for expansion.
Despite a majority of Indian exports to the U.S. being duty-free, around 36 per cent (valued at $32.9 billion out of a total $91.2 billion in 2024) were still subject to tariffs.
Adding complexity to the trade scenario, the U.S. imposed reciprocal tariffs on several nations, including India, on April 2, 2025. However, it paused implementation for 90 days from April 10 to allow for trade negotiations. During this pause, a baseline 10 per cent tariff remains in effect on goods from all countries, including India. Notably, India’s reciprocal tariff of 26 per cent was among the lowest imposed on Asian nations.
The report concludes that while tariff reductions could offer Indian exporters an edge, long-term success will depend on improving competitiveness and capturing greater market share in the U.S. (Source: IANS)
