India has committed to eliminating or reducing tariffs on all US industrial goods and a wide range of food and agricultural products in return. The bilateral agreement marks the most significant trade reset between the two countries in over a decade.

Winners and Losers Among Indian Exporters

Generic pharmaceutical companies stand to benefit the most. The agreement exempts pharma exports from the reciprocal tariff, preserving India’s position as the pharmacy of the world. Companies like Sun Pharma, Dr Reddy’s and Cipla can continue exporting to the US without additional cost burdens.

Gems and diamonds, India’s second-largest export category to the US, also receive exemptions. The Surat-based diamond polishing industry, which processes over 90 per cent of the world’s diamonds, will maintain its competitive edge.

However, textiles, apparel, leather, footwear, organic chemicals and certain machinery face the full 18 per cent tariff. Exporters in Tirupur, Ludhiana and Mumbai’s garment clusters are recalibrating pricing strategies and diversifying toward EU and ASEAN markets.

IT Services and the Broader Corporate Landscape

India’s IT industry grew 6.1 per cent to $315 billion and is largely insulated from goods tariffs, as services trade falls outside the agreement’s scope. TCS, Infosys and HCL Technologies continue to win large contracts in the US market.

Technology companies are expanding their India presence. Kiran Mani joined OpenAI to lead Asia-Pacific growth, signalling that global tech firms see India as a strategic hub for talent and market access regardless of goods tariff dynamics.

Manufacturing Push Gains Momentum

The trade deal accelerates India’s manufacturing ambitions. Electronics and semiconductor companies are expanding production under the Production-Linked Incentive scheme. The agreement’s clarity on tariff rates allows manufacturers to plan multi-year investment cycles with confidence.

India’s GDP growth forecast remains optimistic despite global headwinds, supported by domestic consumption and infrastructure spending. The trade deal adds an export-oriented dimension to this growth story.

What Companies Are Doing to Adapt

Larger Indian exporters are setting up distribution hubs in the US to absorb tariff costs closer to the customer. Some are relocating portions of their supply chains to countries with lower US tariff rates. Smaller exporters are banding together through industry associations to negotiate better logistics and insurance terms.

Industry body FICCI has called the deal “a net positive despite the tariff reality” because it replaces unpredictability with a clear framework. The Confederation of Indian Industry echoed this sentiment, noting that the exemptions for pharma and gems protect India’s highest-value export categories.

Outlook for Indian Companies in FY27

The full impact of the tariffs will become clearer as Q4 FY26 results roll in starting next week. Companies with diversified export portfolios and strong domestic demand are best positioned to navigate the transition. The trade deal, while imperfect, provides the certainty that Indian businesses need to invest, hire and grow.

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Over 60 designers showcased collections across the four days. Highlights included AK|OK by Anamika Khanna, Amit Aggarwal, Rahul Mishra, CHOLA, and Kartik Research. Sustainability and artisanal craftsmanship emerged as the dominant themes of the season.

Heritage Meets Innovation on the Runway

Anamika Khanna’s AK|OK collection celebrated the modern Indian man in layered, evolving silhouettes. The Boy’s Club and Abraham and Thakore, in collaboration with L’Atelier 1664, explored menswear through the lens of tradition meeting functionality.

Rahul Mishra brought his signature sustainability-first approach, using hand-embroidered motifs inspired by Indian wetland ecosystems. Amit Aggarwal continued his experiments with recycled polymer structures, creating sculptural evening wear that drew international attention.

India’s bridal fashion industry crossed Rs 5,000 crore this year, and several designers at LFW showcased bridal collections blending AI-driven personalisation with traditional craftsmanship. The fashion industry’s digital transformation is accelerating across segments.

Textile Sector Turns Optimistic After Difficult 2025

Beyond the runway, India’s textile and apparel industry enters 2026 with cautious optimism. After a challenging 2025 marked by global supply-chain disruptions and elevated US tariffs, several structural reforms are improving competitiveness.

The US-India joint statement from February 2026 introduced a reciprocal tariff rate of 18 per cent on Indian goods including textiles, apparel, leather and footwear. While tariffs remain, the framework provides clarity that exporters lacked in 2025. Industry leaders say predictable tariff rates allow better planning for pricing, sourcing and buyer negotiations.

Lower interest rates, labour-code clarity and expanding Free Trade Agreements with the EU and ASEAN are further strengthening the sector. Strong domestic retail momentum and sustainability-led investments add to the positive outlook.

D2C Fashion Brands Scale Rapidly

D2C brands are building international presence in fashion, beauty and lifestyle. India’s online fashion market is expected to cross $30 billion by 2027, driven by mobile commerce and social media marketing.

Gen Z consumers are reshaping social habits, and their fashion choices lean toward sustainable, locally sourced brands. This demographic shift is driving both legacy designers and new D2C entrants to rethink their strategies.

What Lies Ahead for Indian Fashion

The next major fashion event is India Couture Week in July, where bridal and luxury collections will take centre stage. Meanwhile, textile exporters are watching the April deadline for Jio’s pricing compliance and broader trade policy developments that could reshape supply chains across the sector.

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