India plans to import about $500 billion worth of goods from the US over the next five years. Both sides aim to boost bilateral trade to $500 billion from the current $132 billion, which includes $86.5 billion in exports and $45.6 billion in imports in FY25, as per the joint statement on 7 February.
India’s labour-intensive sectors, including textiles, gems, leather, marine products, rice, fruits, vegetables, and plantation exports like tea, coffee, spices, and cereals, contributed approximately $25.5 billion to US exports in FY25, according to the commerce ministry. Labour-intensive sectors accounted for nearly 30% of India’s total goods exports to the US in FY25.
This assumes significance as India’s key labour-intensive export sectors—led by textiles, gems and jewellery, leather, agro-processing, plantations, and marine products—employ about 75-90 million people.
Key Takeaways
- India is using big-ticket imports to protect its 90 million labour-intensive jobs from US import competition.
- The massive import target is viewed by economists more as a diplomatic strategic signal than a guaranteed trade figure.
- Industry leaders expect to reclaim a 7% share of the US apparel market, with every $1 billion in growth adding 150,000 jobs.
- The lack of a deep tariff moat between India and rivals like Vietnam may keep gains modest.
- Exporters expect a significant shift of US orders back to India within the next three months as the interim framework takes hold.
Trade experts, economists, and officials said this structure shields sectors like textiles, gems, jewellery, leather, seafood, and agro-products from import-related pressure, while enabling India to fulfill US demands in energy security and strategic cooperation.
This design reflects a conscious balancing act. Madhavi Arora, chief economist at Emkay Global Financial Services, said the much-discussed plan to import $500 billion worth of goods from the US over five years should be seen more as a strategic signal than a rigid trade outcome.
“The import push under the pact is centred on crude oil and LNG (liquefied natural gas), defence equipment, aircraft, machinery and high-end technology, categories that have limited overlap with India’s employment-heavy manufacturing base,” said Arora.
She further noted that even in an optimistic scenario, India’s imports from the US are likely to rise gradually to around $125-140 billion per year by FY31, driven by phased, category-wise expansion rather than a sharp step-up.
Textile opportunity
“India’s share in the $80 billion US apparel import market rose from about 5% to nearly 7% over the past two years, before temporarily dipping below 5% in November due to short-term disruptions, not structural weakness,” said Coimbatore-based Prabhu Dhamodharan, convenor of the Indian Texpreneurs Federation (ITF).
With the new trade arrangement giving India a relative advantage, the industry expects a quick return to 6–7% market share and is confident of double-digit export growth in the coming financial year, he said, adding, “Each 1% market share equals roughly ₹7,000 crore in exports, underscoring the opportunity.”
“Every $1 billion of export growth translates into around 1.5 lakh jobs, so the duty relaxation by the US can make employment a key growth engine,” Dhamodharan said. That said, this will not happen overnight or in a dramatic way. “What we are looking at is steady, incremental gains, with employment growth tracking an expected 15% year-on-year increase,” he said, adding that the industry is committed to strengthening competitiveness and product diversification to sustain this momentum.
Trade expert Biswajit Dhar, former professor at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, said that the import commitments under the India–US interim trade framework appear to be skewed towards strategic and capital goods rather than labour-intensive sectors.
“The tariff reduction offered to India is not significantly lower than what competing countries such as Bangladesh and Vietnam enjoy, which limits the potential gains. If the differential had been wider, India could have benefited much more. As it stands, the impact is likely to be modest, and the tariff should ideally have been lower,” Dhar told Mint.
Tariff gaps
Over the last five to six months, the tight trade situation led US buyers to place orders with other countries that would otherwise have come to India, Raja M. Shanmugham, a prominent textile industrialist in Tirupur and former president of the Tiruppur Exporters’ Association (TEA). “However, we expect the next round of order placements to shift back to India over the next three months. That will give a clearer picture of how demand is shaping up.”
If the 18% tariff remains, India will have the lowest duty among competing countries supplying to the US market, Shanmugham said. Europe faces tariffs of around 15%, while countries such as Cambodia, Vietnam and Bangladesh face higher duties.
While the interim trade framework offers some opportunities, agricultural exporters remain cautious, said an executive at a leading agri-goods exporter, who did not wish to be named. “We expect that the import commitments will not adversely impact the agriculture sector, and that employment in the sector will increase.”
Experts also pointed out that the structure of the import commitments aligns with the priorities outlined in the India–US joint statement and subsequent US executive action, which focus on energy diversification, defence cooperation, resilient supply chains and advanced technologies. While these areas deepen strategic and economic ties, they do not directly compete with India’s labour-intensive production ecosystem.
In FY25, textiles exports stood at $10.32 billion, while gems and jewellery shipments were valued at around $10 billion. Marine products contributed $2.7 billion, leather goods $948 million, and agro-based exports, such as rice, $392 million, with fruits and vegetables adding another $331 million. Plantation and allied products, including tea, coffee and spices, were exported to the US at $449.17 million, while cereals accounted for $396.8 million.