Editor’s Note
The U.S. decision to lower tariffs on Indian exports is seen by Moody’s as a major boost for labor-intensive sectors like gems, jewelry, and textiles, potentially revitalizing India’s export growth.
The decision by the United States to reduce tariffs on Indian exports could open up new energetic possibilities for labor-intensive sectors such as gems, jewelry, textiles, and apparel. Moody’s considers this a significant step towards reviving India’s export growth.
While labor-intensive sectors may receive direct benefits from this agreement, other major export sectors such as pharmaceuticals and consumer electronics were already exempt from high tariff rates. Therefore, the immediate impact of this decision on them will be limited. India’s pharma and electronics industries are already in a strong position in the U.S. market, so for them, this reduction will only add positivity to the trade environment.
Moody’s also mentioned in its report that India’s crude oil imports from Russia have decreased in recent months, but completely stopping them is not possible in the near future. India is among the world’s largest oil importers, and relying entirely on non-Russian oil could increase prices in the global market, adversely affecting domestic economic growth. Therefore, keeping energy security and economic stability in mind, India is adopting a balanced policy.
The India-U.S. trade agreement is not just a matter of tariff reduction but also an indication of India’s growing role in the global economic landscape. The increasing reach and cost competitiveness of Indian products in the U.S. market could provide long-term benefits to Indian industries. In particular, this strengthening in labor-intensive sectors could give new heights to employment and production in both rural and urban economies.