Under a trade agreement between the United States and India, US tariffs on goods exported from India to the US have been reduced to 18% from 50%, according to the announcement. The reduction applies to Indian exports to the US and is expected to affect export-oriented companies across multiple sectors.
The announcement follows a prolonged period of negotiations between the two countries. US President Donald Trump stated that the revised tariff structure would lower duties on Indian goods entering the US market. Market participants and experts said the agreement provides clearer market access and tariff visibility for exporters.
Brokerage firm Axis Direct stated that the impact of the agreement should be assessed over the medium term rather than the short term. According to the brokerage, sustained and effective implementation could influence India’s export competitiveness, manufacturing capacity and integration with global supply chains.
Pharmaceuticals and healthcare
Experts said the pharmaceutical sector may see a gradual impact from the tariff reduction. Indian pharmaceutical companies derive approximately 30–40% of their total revenue from the US market. A tariff cut of 700 basis points is expected to reduce overall cost pressures on exports and improve competitive positioning in the US generic drug market. The development is expected to provide greater earnings visibility for FY2027–28. Companies cited by experts include Dr Reddy’s Laboratories, Aurobindo Pharma, Lupin, Cipla, Sun Pharma, Zydus Lifesciences and Divi’s Laboratories.
Chemicals
The chemicals sector may also be affected by the lower US tariffs. Experts said that if tariffs on China remain elevated, Indian companies could strengthen their position in North American supply chains. This could support raw material availability and lower the cost of imported inputs. Companies referenced include Aarti Industries, UPL, SRF, Vinati Organics and Gujarat Fluorochemicals, which have exposure to the US market.
Textiles
The agreement may influence the textiles and apparel sector, where several Indian companies generate a significant portion of revenue from the US. Tariff reductions are expected to affect export volumes and margins. Companies cited include Welspun Living, Gokaldas Exports, Pearl Global Industries, KPR Mill, Arvind, Vardhman Textiles, Kitex Garments and Indo Count Industries.
Automobiles
The US is a key market for Indian auto component manufacturers, accounting for about 25–30% of total export revenue. The tariff reduction is expected to lower export barriers and affect cost competitiveness, with implications for India’s role in global automotive supply chains. Experts noted that benefits for large vehicle manufacturers may be limited due to lower direct exports. Companies mentioned include Steel Strips Wheels, Sanmar Engineering, Tata Motors, Bharat Forge and Sona BLW.
Information technology
The trade agreement also signals implications for the IT sector. Experts said policy measures announced in the budget could reduce regulatory hurdles and support India’s positioning in global IT and cloud services. Companies identified as having exposure include TCS, Infosys, HCL Technologies, Wipro, Tech Mahindra and Bharti Airtel through its Nxtra Data Centre subsidiary.
