India’s apparel, footwear, plastics and rubber exports are set to gain in the US after tariff reductions under the India–US interim trade pact.
India’s exports from labour-intensive sectors such as apparel, footwear, plastics, rubber, organic chemicals and home décor are set to receive a major boost in the US market following a reduction in tariffs under the India–US interim trade pact, officials and industry bodies said. India and the United States on announced that they have reached a framework for the first phase of a bilateral trade agreement, under which both sides will reduce import duties on a range of goods to enhance two-way trade.
According to a joint statement, the US will reduce tariffs on Indian goods to 18 per cent. The US has removed the punitive 25 per cent additional duty on Indian products, while the 25 per cent reciprocal tariffs are also expected to be brought down to 18 per cent shortly. The tariff cuts will apply to Indian exports including textiles and apparel, leather and footwear, plastics and rubber products, organic chemicals, home décor, artisanal products, gems and jewellery, as well as certain machinery and aircraft parts. India will also receive a preferential tariff rate quota for automotive parts, the statement said.
India’s labour-intensive exports were hit hard after the US imposed steep 50 per cent tariffs from August 27, forcing exporters to diversify into markets such as Europe and Africa. However, the US has remained a key destination for these sectors. Commenting on the development, A Sakthivel, Chairman of the Apparel Export Promotion Council (AEPC), said the tariff reductions would significantly strengthen the global competitiveness of Indian textiles and apparel.
Ready-made garment exports rose by a modest 2.36 per cent to USD 11.6 billion during April–December 2025–26, with the US remaining the sector’s largest market. Ramesh Kumar Juneja, Chairman of the Council for Leather Exports (CLE), said the deal could help increase leather exports to the US by around 30 per cent in the first year of implementation. “At present, our exports to the US stand at about ₹15,000 crore, and the sector employs nearly 42 lakh people. This deal will give a major boost,” he said. Leather and footwear exports declined marginally by 0.23 per cent to USD 3.3 billion during April–December 2025–26.
The Gems and Jewellery Export Promotion Council (GJEPC) said the diamond sector had suffered a severe setback over the past year, with India’s cut and polished diamond exports to the US—its largest market—falling by over 60 per cent, from USD 3.64 billion in April–December 2024 to USD 1.45 billion in April–December 2025, due to loss of competitiveness from high tariffs.
“We are confident that, upon conclusion of the Interim Agreement, diamonds and coloured gemstones will receive full zero-duty treatment as envisaged, restoring competitiveness in our most critical market,” the council said. Commerce and Industry Minister Piyush Goyal said several other Indian exports—including machinery parts, aircraft parts, elementary auto components, coins, platinum, essential oils, home décor items, inorganic compounds, paper, plastics and natural rubber—would benefit from zero reciprocal tariffs under the agreement.
Industry representatives said the interim pact is expected to revive export momentum, improve margins and support employment across multiple labour-intensive sectors.
News Courtesy : rediff