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With US tariffs on Indian goods cut to 18% from 50% earlier, and zero duties on select products, the deal opens vast $30-trillion market for Indian businesses, especially MSMEs.
The decision to bring tariffs down to zero on gems and diamonds offers an immediate boost to India’s gems and jewellery industry.
India’s interim trade framework with the US marks a sharp reset in bilateral commerce, with tariff cuts, market-access commitments and regulatory easing that directly benefit export-oriented sectors. With US tariffs on Indian goods cut to 18 per cent from 50 per cent earlier, and zero duties on select products, the agreement opens a vast $30-trillion market for Indian businesses, especially MSMEs.
Here’s a clear, sector-wise look at who stands to gain the most and why the deal matters on the ground.
Textiles & Apparel: Stronger Access, Better Margins
Textiles and apparel emerge as one of the biggest winners. Lower reciprocal tariffs significantly improve price competitiveness for Indian exporters in the US, the world’s largest apparel market. With duties coming down to 18 per cent, Indian manufacturers can offer more competitive pricing to American buyers, expand order volumes and improve margins. The framework also provides sustained preferential market access, which could help Indian firms regain market share lost to competing Asian exporters.
Leather & Footwear: Competitiveness Boost in a Key Market
For leather and footwear exporters, tariff reductions translate directly into improved competitiveness. The US is a major destination for value-added leather goods, and lower duties help Indian exporters price products more attractively without compressing margins. This is particularly significant for MSME-heavy clusters that depend on exports for growth and employment generation.
Gems & Jewellery: Zero Tariffs, Immediate Upside
The decision to bring tariffs down to zero on gems and diamonds offers an immediate boost to India’s gems and jewellery industry. The US is one of the largest buyers of polished diamonds and jewellery, and duty-free access improves both volumes and profitability. Exporters also benefit from smoother trade flows and reduced cost uncertainty, supporting India’s position as a global processing and design hub.
Generic Pharmaceuticals: Tariff Relief Plus Regulatory Clarity
Generic pharmaceuticals stand out as a high-impact gainer. Zero tariffs on a wide range of generic medicines, combined with negotiated outcomes on regulatory issues, strengthen India’s role as a key supplier of affordable drugs to the US. Beyond pricing advantages, the framework addresses long-standing trade barriers, offering greater predictability for Indian pharma companies that operate in a tightly regulated US market.
Aircraft Parts: Section 232 Exemptions Lift ‘Make in India’ Aviation
The agreement grants India exemptions under Section 232 on aircraft parts and related components, a crucial gain for the domestic aerospace ecosystem. Zero tariffs and quota-based access improve the business case for manufacturing aircraft parts in India for global supply chains. This aligns with the government’s ‘Make in India’ push in aviation and supports job creation in high-skill manufacturing.
What This Means for Businesses and Investors?
Beyond individual sectors, the broader framework addresses non-tariff barriers, sets rules of origin to ensure benefits accrue primarily to India and the US, and commits both sides to preferential market access on a sustained basis. India has also ring-fenced sensitive agricultural and dairy products, ensuring domestic interests remain protected even as industrial and export-led sectors gain ground.
For exporters, MSMEs and investors, sectors with tariff relief, zero-duty access and regulatory easing are best placed to scale up exports, improve margins and attract fresh investment.
If you operate in textiles, leather, gems and jewellery, pharmaceuticals or aircraft components, this interim trade deal directly strengthens your access to the US market and improves the economics of doing business.
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February 07, 2026, 09:21 IST
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