The India-US Trade Deal: What’s the Future Looking Like?

Finally, the time has come. By the end of December 2025, India is expected to sign the first tranche of the much-awaited bilateral trade agreement (BTA) with the U.S.

Which means the long-awaited India-US trade deal is all set to close soon! But the question is, how will things go after the agreement? Will it be a big relief for India and its export market, or will it be a nightmare?

Let’s explore the blog to find out!

The End of an Uncertainty

Perhaps one of the biggest and immediate benefits that the upcoming India-US trade deal proposal is bringing is an end to the business uncertainty for Indian exporters.

Why so? Well, after the U.S imposed a 25% tariff initially, they added an extra 25% tariff later on as a response to India’s continued oil purchase from Russia. So, the total tariff duty on Indian goods accounted for 50%, which made exports to the U.S quite challenging, because of three basic reasons-

• Export businesses in India faced higher costs.
• A lot of export orders got delayed.
• Some export orders were called to a temporary halt.

However, the upcoming trade deal, according to Pankaj Pandey, Head of Research at ICICI Securities, is expected to reverse those significant tariffs. And once that happens, it will open up the trade between the U.S and India, and unlock the volumes of long-delayed exports rapidly. So, this might just be great news for Indian exporters.

But how will that be possible? Well, once the tariff issue is resolved, it will serve as a trade relief for Indian exporters. That’s because the companies can once again compete with fair prices, which will directly translate into business growth.

What Sectors are Most Likely to Benefit from the India-US Trade Deal?

It’s an obvious fact that when it comes to such crucial trade agreements, there are always certain sectors that enjoy the benefits. And the current India-US trade negotiations haven’t been an exception.

So, let’s take a close look at the sectors that will enjoy the most benefits of this agreement-

• The Textile and Apparel Sector

Being one of the major textile hubs, the stock prices of Indian textile exporters like Gokaldas Exports, Welspun Living, KPR Mill, Pearl Global Industries, Trident Ltd., etc., are expected to show robust growth. How?

Well, because of the India-US trade deal tariff cuts, Indian exporters will have better access to the U.S market. This will directly translate to more orders and better profit margins.

• The Auto Ancillaries Sector

Not just the textile sector, but parts manufacturers of the automobile sector are also expected to experience an overall boost. The stock prices of Bharat Forge, Balkrishna Industries are most likely to see a significant surge.

Other than these, organizations like Greenlam Industries, Coforge, ELGi Equipments Ltd., etc., are also expected to witness significant gains once the deal is settled. This, in turn, reflects the positive impact of the India-US trade deal via the removal of the current punitive tariffs. In fact, some of the afore-mentioned companies have shown projections of a 34% increase in their stock prices if the deal closes successfully!

The Bigger Picture

Some of you might be thinking that the main focus of the India-US trade deal news is on the tariff cuts. However, what you may not have realized is that both India and the U.S are aiming to establish a deep economic relationship in the long run!

According to reports published in the Republic News, this bilateral trade is expected to double the revenues from the present $191 billion to a whopping $500 billion by 2030! This significant upsurge points to a strong tie-up between two of the major global economies. Added to that, this tie-up is also expected to foster more investments and even more collaborations.

The Investors’ Perception

When it comes to investors, the deal signifies great opportunities. Why?

Because once the high tariffs are cut, Indian export companies would naturally start to make more profits. And it’s a general rule of thumb that when the profits of a company rise, its stock prices experience a surge as well!

So, for smart investors, now is the time to shift their focus to companies that rely on exports. In fact, ICICI Direct has prepared a ‘One Click Portfolio’ that highlights stocks that are most likely to experience substantial profits from this trade agreement. So, if you were planning to use AI Trader, make sure to mark up and track the stocks from the One Click Portfolio to gain some massive profits in the future!

Wrapping Up

The U.S’s imposition of tariffs and using them as a strategic instrument to seek leverage against other economies is not a new thing! For instance, tariffs imposed by President Donald Trump have had a substantial impact on the Korean beauty industry.

However, the finalization of the India-US trade deal is actually pointing towards a positive future. How so?

Well, apart from the immediate tariff challenges, the deal is laying a foundation for a strong economic and trade partnership between the two nations. And this is great news for export-oriented businesses, as the deal is expected to help India become a crucial part of global supply chains.

F.A.Qs

1. Which stocks will benefit from the India-US trade deal?

Here is a list of stocks that are expected to witness  a surge from the trade deal-

• Greenlam Industries
• Gokaldas Exports
• Coforge
• Balkrishna Industries
• Bharat Forge
• Trident Ltd.
• Pearl Global Industries, etc.

2. Who is the USA’s biggest trading partner?

If you judge based on total trade volume, which includes exports and imports, Mexico has lately been one of the biggest trading partners of the U.S, followed by Canada and China.

3. What if India stops trading with the US?

If India cuts off its trading ties with the U.S, here are the two things that are most likely to happen-

• India would lose a significant portion of export revenue. Along with it will follow job losses.
• As for the U.S, the prices for technology, supply chain distributions, etc., will increase.

4. Who is China’s biggest trading partner?

The U.S stands as China’s largest trading partner (in terms of single-country partner), which is followed by Japan and South Korea (in terms of trade volume).

5. Which international trade agreement is India aiming to finalize by the end of 2025?

Currently, India is all set to finalize the India-EU (European Union) Free Trade Agreement by the end of 2025.

6. Who is the No. 1 exporter of India?

Reliance Industries Limited (RIL) is considered to be the leading exporter of India, because of its enormous petroleum product shipments.

Amilia Brown

Amilia Brown is a seasoned business writer & strategist who simplifies complex business concepts and turn them into engaging narratives. As a trusted business writer, she delivers actionable insights with precision.