1. Textiles and Apparel
This sector is arguably the biggest beneficiary. With the US accounting for nearly 28% of India’s textile exports, the lower tariff restores India’s edge over competitors like Bangladesh and Vietnam.
- Impact: Share prices of major players like Gokaldas Exports and Welspun Living surged up to 20% following the news.
- Edge: Indian garments now face lower duties (18%) than those from Bangladesh (20%), potentially leading to a massive recovery in order books.
2. Gems and Jewellery
The sector had seen a nearly 44% drop in exports over the last year due to tariff uncertainty.
- Impact: The 18% cap provides immediate margin relief. Retail-heavy stocks like Kalyan Jewellers and Titan rallied as investors anticipated a rebound in US consumer demand for cut and polished diamonds.
3. Engineering and Auto Ancillaries
Engineering goods comprise nearly a quarter of India’s total merchandise exports.
- Impact: Companies like Bharat Forge and Ramkrishna Forgings, which supply critical components to the US automotive and industrial sectors, will see improved price competitiveness against East Asian suppliers.
- Strategic Gain: The deal helps secure India’s position in the global “China-plus-one” supply chain.
4. Technology and IT Services
While IT is a services-led sector not directly hit by goods tariffs, the deal provides a massive sentiment boost.
- Investment: US tech giants (Microsoft, Google, Amazon) are expected to accelerate investments in India’s AI and data center infrastructure, especially after the 2026 Union Budget offered tax holidays for such projects.
5. Seafood and Agriculture
India is the largest exporter of shrimp to the US.
- Impact: Exporters like Avanti Feeds and Choice Group are celebrating a “victory,” noting that an 18% duty makes Indian seafood more affordable in American supermarkets than products from Thailand or Indonesia.
Strategic Advantage over China
A critical takeaway is India’s improved position relative to China. While Indian goods now face an 18% tariff, Chinese exports to the US remain burdened by duties around 34%. This 16-percentage-point differential is expected to pivot major US retailers toward Indian manufacturing.