New Delhi, June 23 Although the US is India’s largest export partner, there is scope to increase exports further in areas such as smartphones, certain pharma products and labour-intensive exports such as textiles and gems and jewellery under the bilateral trade agreement (BTA) between the two countries that is expected to be signed by the fall (September-October) of this year, according to a Crisil report released on Monday.
To begin with, India should be prepared to see more imports from the US under the BTA. This is because India’s tariffs are much higher than those of the US, and bringing these down would be advantageous to exporters in the US, the report points out.
It highlights that the imminent bilateral trade agreement will likely lead to a reduction in India’s goods trade surplus with the US.
India would be able to import more energy products, defence equipment and certain agricultural products, among others, from the US after the agreement is signed.
The report further states that India accounts for only a small part of the USA’s imports. India’s exports, however, are unlikely to see a major spike because the focus of the Donald Trump administration is to reduce its trade deficit with India, and most of India’s top exports to the US are already duty-free (i.e. before the application of baseline 10 per cent, which is applicable since April 10).
Besides, the export potential would also depend eventually on the amount of tariff India faces when compared with other competing nations, it added.
According to the report, there is some potential to improve. The US is not only the world’s largest economy, but also the world’s largest importer. In 2024, its goods imports stood at $3.36 trillion (in contrast, China and Germany, the second- and third-largest importing nations, recorded $2.59 trillion and $1.43 trillion worth of goods imports, respectively), according to ITC Trade Map.
But India’s share in the US’s global imports was just 2.7 per cent. Thus, there is some scope for India to increase its exports to the US.
The report said that "to understand the areas where India can potentially increase exports to the US, we assess the following two matrices".
"Among the top 25 items India exports to the US, products such as diamonds, marine products and bed linen already have a high penetration there. The penetration remains low for others, such as smartphones and certain pharma products.
Also, only two of India’s top 25 export items faced the most favoured nation (MFN) tariff in 2024; others were duty-free. Clearly, this means Indian goods will have to become more competitive to gain further market share.
Though a vast majority of India’s exports to the US are duty-free, several products attract MFN tariffs. For instance, out of the US’s goods imports of $91.2 billion from India in 2024, $32.9 billion worth of goods (36 per cent) attracted tariffs.
The US announced reciprocal tariffs on India and a host of other nations on April 2, 2025, and then paused the increase for 90 days from April 10 to negotiate trade deals with these countries (for India, the reciprocal tariff was 26 per cent, lower than the tariff on many other Asian peers).
During the pause period, a 10 per cent base tariff remains applicable (over and above the existing tariffs) on all countries, including India.
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