New Delhi— India’s exports of pharmaceuticals, textiles, and gems and jewellery to the United States are likely to see an uptick following the expected signing of a bilateral trade agreement (BTA) between the two countries later this year, according to a report by Crisil released on Monday.
The U.S. is already India’s largest export destination, but the report suggests that sectors such as smartphones, select pharmaceutical products, and labor-intensive goods like textiles and jewellery still hold untapped potential. The agreement, anticipated by September or October, could help unlock this potential.
However, the report notes that India should brace for a rise in imports from the U.S. once the agreement takes effect. This is due to India’s relatively higher tariff rates, which, when lowered under the pact, would benefit American exporters. As a result, India’s current trade surplus with the U.S. could shrink.
Post-agreement, India is expected to increase its imports of U.S. energy products, defense equipment, and certain agricultural goods. While India is a modest player in terms of the U.S.’s overall imports, the trade pact offers room for growth. In 2024, the U.S. imported $3.36 trillion worth of goods, compared to China’s $2.59 trillion and Germany’s $1.43 trillion. India accounted for just 2.7 percent of these U.S. imports.
Despite this low share, the report notes that India’s exports may not see a dramatic spike, primarily because many of its top exports to the U.S. are already duty-free. Moreover, the Donald Trump administration’s focus on reducing the U.S. trade deficit with India could further limit gains.
Competitiveness, especially in comparison with rival exporting nations, will ultimately determine how much India benefits. According to the report, among the top 25 products India exports to the U.S., items like diamonds, seafood, and bed linen already enjoy strong market penetration. In contrast, smartphones and certain pharmaceutical products lag behind.
In 2024, only two of India’s top 25 exports to the U.S. were subject to the Most Favored Nation (MFN) tariff rate, while the rest were duty-free. However, of the $91.2 billion worth of goods India exported to the U.S. that year, approximately $32.9 billion—around 36 percent—still attracted tariffs.
On April 2, 2025, the U.S. announced reciprocal tariffs on India and several other nations. These tariffs were paused for 90 days starting April 10 to allow for trade negotiations. During this pause, a base tariff of 10 percent continues to apply on all imports, including those from India. Notably, the reciprocal tariff rate on Indian goods was set at 26 percent, lower than that for many other Asian countries. (Source: IANS)
