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TradeDeal – India’s leading industry bodies on Tuesday welcomed the India-US trade agreement, saying it is expected to improve the global competitiveness of Indian goods while supporting manufacturing expansion, job creation, and stronger supply chains. Business leaders described the move as a timely step that reflects growing economic trust between the two countries.

The agreement includes an immediate reduction in the United States’ reciprocal tariff on Indian products from 25 percent to 18 percent. In addition, Washington has removed the extra 25 percent duties that were earlier imposed on India in connection with its purchase of Russian oil. Industry chambers believe these changes will make Indian exports more price-competitive in the American market.

Tariff cut strengthens bilateral economic ties

Rajiv Memani, President of the Confederation of Indian Industry, said the tariff reduction marks meaningful progress in economic relations between the two nations. He noted that bringing tariffs down to 18 percent sends a positive signal at a time when global trade is becoming increasingly competitive and complex.

According to Memani, the agreement highlights the shared intent of India and the United States to expand cooperation in trade, technology, and investment. He added that industry bodies are keen to work closely with businesses on both sides to ensure that the benefits of the agreement translate into measurable outcomes, including higher trade volumes and long-term economic growth.

Lower duties expected to reduce costs and inflation pressures

PHD Chamber of Commerce and Industry President Rajeev Juneja said the tariff rollback reflects a renewed US commitment to open trade and economic efficiency. He explained that lower duties can ease the cost burden on domestic industries by making imported inputs and capital equipment more affordable.

Juneja pointed out that reduced tariffs help strengthen supply chains and may also contribute to easing inflationary pressures by lowering production and consumer prices. He said sectors such as manufacturing, technology, healthcare, and renewable energy stand to gain from improved access to critical components and intermediate goods.

Political understanding adds predictability to trade

Juneja also underlined the role of political stability and leadership-level engagement in shaping trade outcomes. He said the agreement aligns with the cooperative environment fostered by the strong working relationship between Prime Minister Narendra Modi and US President Donald Trump. According to him, such engagement reinforces trust and predictability, which are essential for businesses making long-term investment decisions.

Industry experts believe this political alignment has helped smooth negotiations and create conditions for sustained collaboration in trade and investment.

Apparel industry sees major relief and opportunity

The apparel sector, one of India’s largest export industries, has reacted positively to the development. Dr A Sakthivel, Chairman of the Apparel Export Promotion Council, said the agreement comes at a crucial time, as Indian garment exporters had been under pressure due to earlier US tariffs that reached as high as 50 percent.

Sakthivel said the United States remains India’s largest export destination for apparel, and improved trade terms will significantly enhance the competitiveness of Indian products. He added that better access to the US market is likely to boost export volumes, attract new investments across the apparel value chain, and strengthen India’s reputation as a dependable global sourcing destination.

Employment impact seen as a key benefit

Beyond exports and investment, industry leaders emphasized the employment potential of the agreement. Sakthivel noted that the apparel sector is one of the country’s largest job providers, particularly for women and workers in labor-intensive roles.

He said the improved trade environment is expected to help protect existing jobs while also creating new employment opportunities. Industry chambers believe that as exports grow and new investments flow in, the positive effects will be felt across related sectors, supporting inclusive economic growth.

Overall, business groups see the India-US trade agreement as a balanced and forward-looking step that strengthens economic ties, supports domestic industries, and positions India more firmly within global supply chains.