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India-US Trade Deal: Tariff relief in trade with the United States (US) could unlock an export opportunity of nearly $50 billion for India, particularly benefiting labour-intensive sectors that have been under pressure in recent months, Confederation of Indian Industry (CII) President Rajiv Memani said on Tuesday.

“With the US being India's largest trading partner, easing of tariff-related uncertainty is expected to arrest the decline in key export segments such as garments, leather, gems and jewellery, fisheries and auto components, while also strengthening the broader India-US trade and investment relationship,” he was quoted as saying by ANI.

Memani noted that the United States, the world’s largest economy, is also India’s biggest trading partner, with total Indian exports estimated at $80–90 billion annually. Of this, nearly 50–60 per cent — around $50 billion — comes from labour-intensive sectors including garments, leather, fisheries, gems and jewellery, auto components and engineering goods.

“These sectors had started feeling the impact of tariffs over the last few months, and because they are highly labour-intensive, the impact was also being felt on employment,” Memani said.

With India’s tariff level now becoming more competitive at around 18 per cent compared to other countries, he said the move opens up opportunities for these sectors to regain momentum. “At the very least, the decline that had begun should get arrested, and hopefully these sectors can return to the growth rates they were experiencing earlier,” he added.

Memani also expressed optimism that the easing of tariff-related uncertainty could pave the way for a more comprehensive India-US free trade agreement (FTA) over the next 12 months. “While India-US investment flows in areas such as technology, artificial intelligence and data have remained strong, other areas of trade and investment had slowed due to the tariff overhang,” he said.

“With this overhang going away, one major perceived risk is removed. This can reignite overall trade and investment between India and the US,” he said, calling the opportunity “massive” given India’s growth trajectory, competitiveness and status as the fastest-growing major economy, alongside the scale of the US market.

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Highlighting the strategic dimension, Memani described India-US ties as a highly complementary relationship between two democracies, with significant potential to expand trade and investment. He added that improved market access is crucial for the success of initiatives such as Make in India.

“Labour-intensive manufacturing depends heavily on large export markets. When markets open up whether the EU, where we have concluded a trade deal, or the US, where a trade agreement exists and an FTA is hoped for it strongly encourages manufacturing in India,” he said. Memani further said broader market access would enhance India’s competitiveness and give a significant boost to labour-intensive manufacturing, reinforcing the Make in India push and supporting employment growth.

White House Deputy Press Secretary Kush Desai lauded the India-US deal as historic, calling it a win for American workers and industries. In a post on X, Desai said, “The Dealmaker in Chief has secured a trade deal with a fast-growing, top five global economy that's home to over one billion people. Another historic victory for American workers, farmers, and industries.”

Meanwhile, India’s Ambassador to the US, Vinay Mohan Kwatra, also welcomed the agreement, saying it would create vast opportunities for both nations.

In a post on X, Kwatra said, “A big WIN for a consequential partnership under the leadership of Prime Minister Narendra Modi and President Donald Trump. India and USA announce trade deal creating vast new opportunities for the two economies and the people of our two great nations. Today's announcements herald an exciting new phase in our partnership.”

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Trump and PM Modi on Monday said that India and the United States have reached a trade deal, under which Washington has agreed to cut tariffs on Indian goods to 18 per cent from 50 per cent, which had come into effect on August 27.

The meeting is part of Jaishankar’s three-day visit to the United States, during which he is participating in the inaugural Critical Minerals Ministerial on February 4, hosted by Washington. Ahead of the ministerial, the US Department of State said Secretary Rubio will bring together partners from across the globe to strengthen cooperation on critical mineral supply chains.