India-US trade deal: Textile, jewellery, engg companies expect order book to swell

New Delhi: Apparel and home textile exporters are anticipating a 20% rise in overseas shipments over the next five to six years provided they are able to build sufficient capacities to meet an expected surge in orders from the US.

The engineering sector, on the other hand, aims to recover lost market share through higher exports of machinery parts, pumps, compressors and electrical equipment, following the Trump administration's move to cut tariffs on Indian goods to 18% from 50%.

A tariff reset by the US would also enhance landed-price competitiveness and support stronger offtake across both basmati and non-basmati rice varieties. This would allow India to expand market share in the US while competing more effectively with other countries, according to rice exporters.


"Similarly, products such as machinery, machinery parts, pumps, compressors, electrical equipment, auto components, steel and aluminium items, industrial valves, and boilers will gain a clear advantage in the US market as a result of the lower tariff," said Pankaj Chadha, chairman, Engineering Export Promotion Council (EEPC).

Although the US government's Section 232 tariffs on steel, aluminium, automobile and auto components remain in place, there is growing hope that the new trade deal may eventually pave the way for easing those as well. India's home textile and furnishing industry, and US importers and retailers of their merchandise were among the worst affected by the 50% tariffs imposed by the US, according to the cotton textile exporters.

In January-November last year, India had the largest volume share of cotton sheets and terry towels imported into the US at 45% and 38% respectively. The latest 18% tariff is comparatively lower than India's competing countries such as Pakistan, Bangladesh, Vietnam, and China. "It is now important for the industry to get ready as current capacities will not allow us to seize this big opportunity," said Sanjay K Jain, chairman, ICC National Textile Committee. "We are not talking of a 5-10% increase. I can see a high double digit or even more than 20% increase in garment exports if you're able to build capacity over the next few years." The Gem & Jewellery Export Promotion Council (GJEPC) termed the India-US trade agreement as a "vital relief measure for India's gem and jewellery sector", which faced severe pressure from escalating US tariffs.

The US remains India's largest gem and jewellery export market, accounting for 31% at $9.23 billion of total exports in FY25. In 2025, reciprocal tariffs disrupted trade flows to the US sharply. Duties on polished diamonds and coloured gemstones surged from nil to 10% in April, and further to 50% by August-unviable for these raw materials, straining working capital, liquidity, and margins. Jewellery duties jumped from 5-7% to 55-57%.