India-US trade deal: India and the United States have announced a crucial trade agreement that brings immediate relief to Indian exporters. Washington has reduced reciprocal tariffs on Indian goods to 18% from 25%, a move that is effective immediately and signals a reset in trade dynamics between the two countries.
US President Donald Trump confirmed the development, saying, “We agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%. They will likewise move forward to reduce their Tariffs and non-tariff barriers against the United States to ZERO,” signaling swift implementation and mutual market access.
The announcement comes after a period when tariffs as high as 50% had hurt competitiveness of Indian goods in the US market, leading to margin pressure and uncertainty in export-linked sectors. With tariffs now lowered, companies with significant exposure to the US are expected to see improved order visibility, margin expansion, and stronger pricing competitiveness.
Sonam Srivastava, Founder and Fund Manager at Wright Research PMS, noted that the reduction in tariffs from 25% to 18% under the newly signed India–US trade deal is a meaningful positive for Indian equities, both from a sentiment and earnings visibility standpoint.
Sectors likely to be in focus after tariff relief
The reduction in US reciprocal tariffs to 18% is expected to shift investor attention toward export-oriented sectors where earnings had come under pressure due to higher duties. With pricing competitiveness improving and margin headwinds easing, companies with meaningful US revenue exposure could see better order visibility and improved profitability.
As Divam Sharma, Co-Founder and Fund Manager at Green Portfolio PMS, observed, “Key sectors that can benefit include textiles and apparel, auto ancillaries and engineering, specialty chemicals, agro and seafood exports, and select electronics and consumer manufacturers with US exposure. This aligns well with the recent budget, which clearly focuses on exports, manufacturing, and integrating India deeper into global supply chains.”
textiles and apparels: India’s textile and apparel sector stands out as one of the biggest beneficiaries of this trade pact. The US accounts for nearly 28% of India’s total textile exports, making it the single largest destination. Additionally, more than half of India’s textile and apparel imports are linked to US cotton, highlighting deep trade integration. After prolonged pressure due to tariff costs, the sector now stands to gain significantly through better margins, improved competitiveness, and stronger export demand.
Stocks to watch – Welspun India, Trident, Indo Count Industries, Gokaldas Exports, Pearl Global, Himatsingka Seide, Vardhman Textiles, SP Apparels, Arvind, KPR Mills
Seafood: The seafood segment, particularly shrimp and frozen food exporters, relies heavily on the US market. With tariffs coming down, companies in this segment could see sharper improvement in earnings visibility and demand recovery. Exporters with a higher dependence on the US are expected to benefit faster as pricing pressures ease and buyer confidence returns.
Stocks to watch – Avanti Feeds, Apex Frozen Foods, Waterbase
automobiles and Auto Ancillaries: Auto component manufacturers with strong US exposure may see sustained order inflows from global OEMs. Lower tariffs can help protect margins and reinforce India’s positioning as a cost-efficient manufacturing hub. The sector, which had been navigating margin pressures due to tariff costs, now finds itself in a more favorable competitive position.
Stocks to watch – Sona BLW, Ramkrishna Forgings, Bharat Forge, Tata Motors, Samvardhana Motherson, Balkrishna Tyres, Sansera Engineering, Apollo Tires
Chemicals: Specialty and agrochemical companies with the US as a key end market are likely to gain from improved export competitiveness. The reduction in tariffs offers room for margin expansion and better order visibility for chemical manufacturers that had been facing pricing headwinds.
Stocks to watch – UPL, SRF, Jubilant Ingrevia, Aarti Industries, PI Industries, Atul, Navin Fluorine, Deepak Nitrite, Vinati Organics, Alkyl Amines, Gujarat Fluorochemicals
consumer: Select consumer exporters, particularly in packaged food and rice products, could also see incremental benefits. With improved access to the US market and reduced pricing pressure, these companies may experience better demand traction and export growth.
Stocks to watch – LT Foods, KRBL, Tata Consumer Products
Gems and Jewellery: The tariff reduction also brings relief to India’s gems and jewelery sector, which depends significantly on the US as a consumer market. Colin Shah, MD, Kama Jewelry, highlighted that this partial relaxation is likely to restore confidence among Indian exporters and American buyers after months of tariff-related sentiment pressure.
Overall, the easing of US tariffs is emerging as a meaningful positive for multiple export-oriented sectors. With margins improving, competitiveness strengthening, and order pipelines becoming clearer, the India–US trade deal could act as a catalyst for export-driven earnings revival across several industries.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
