India’s Exports of Pharma, Textiles, Jewellery to US Expected to Rise After Bilateral Trade Agreement

New Delhi: India’s exports of pharmaceuticals, textiles, and gems & jewellery to the United States are expected to rise once a bilateral trade agreement (BTA) between the two countries is signed—likely by September or October 2025, according to a report by Crisil released on Monday.

The US is already India’s largest export destination, yet there is significant potential to expand exports in key sectors such as smartphones, select pharma products, and labour-intensive goods. The proposed BTA could serve as a major catalyst for this growth.

However, the report cautions that India should also prepare for a rise in imports from the US after the agreement. This is due to India’s relatively higher tariff structure, which, once lowered, will give US exporters greater market access.

The agreement is also expected to narrow India’s goods trade surplus with the US. In return, India could see increased imports of energy products, defence equipment, and select agricultural goods from the US.

Although India has a presence in US imports, it remains modest. In 2024, the US imported goods worth $3.36 trillion, but India’s share was only 2.7%, as per data from the ITC Trade Map. In comparison, China and Germany—the second and third-largest importers—recorded imports of $2.59 trillion and $1.43 trillion, respectively.

The report notes that India’s exports may not spike sharply, especially since many top Indian exports are already duty-free under US trade regulations (excluding the 10?se tariff introduced in April 2025). Furthermore, former President Donald Trump’s administration had shown a strong focus on reducing the US trade deficit with India, which could influence how the agreement is framed.

The competitiveness of Indian exports will depend on the tariffs faced relative to other countries. According to the report, only two of India’s top 25 export items to the US attracted MFN (Most Favoured Nation) tariffs in 2024, suggesting that many Indian goods already enjoy duty-free access.

However, there is still room for growth in under-penetrated categories like smartphones and certain pharmaceutical items. In contrast, products like diamonds, seafood, and bed linen already have a strong foothold in the US market.

Out of the total $91.2 billion in goods exported by India to the US in 2024, about $32.9 billion (36%) attracted tariffs, indicating a significant share of exports still faces barriers.

On April 2, 2025, the US announced reciprocal tariffs on India and other nations. However, these were paused for 90 days from April 10 to allow room for trade negotiations. During this pause, a 10?se tariff remains applicable on all imports from India and other countries, in addition to existing tariffs.

According to Crisil, the upcoming trade agreement offers India an opportunity to improve its position in the world’s largest import market, but will also require increased competitiveness and strategic positioning.

With inputs from IANS