India and the US have officially signed a trade deal. The US has lowered tariffs from 25% to 18%. This change comes immediately, allowing Indian exporters to breathe easier.
Lower tariffs mean better profit margins and competitiveness for companies with strong ties to the US market. Sectors like textiles, seafood, auto parts, chemicals, and certain consumer goods are set to gain the most.
Historically, high tariffs as steep as 50% had been in place since August 27, making it tough for Indian products to compete in the US. Now, relief is on the way, and those companies will likely see a boost in business.
One of the biggest winners is the textile and apparel sector. About 28% of India’s total textile exports go to the US, making it a crucial market. Companies like Welspun India and Trident, which rely heavily on US sales, stand to benefit significantly. Here’s a quick look at some textile companies with high exposure to the US:
- Indo Count Industries – 70%
- Kitex – 70%
- Gokaldas Exports – 67%
- Pearl Global – 64%
The seafood industry is also in line for a boost. The US is an essential market, especially for shrimp. Companies like Apex Frozen Foods and Avanti Feeds could see significant gains, thanks to their sales in the US.
Similarly, auto parts manufacturers like Tata Motors and Bharat Forge can expect greater demand. Lower tariffs help maintain order flow and improve profit margins, reinforcing India’s role as a manufacturing hub.
The chemical sector, particularly specialty and agrochemicals, will thrive under this new agreement. With the US as a vital market, companies like UPL and SRF are set to gain from the improved conditions.
Consumer companies, too, will likely reap benefits, especially those exporting packaged foods. With companies like LT Foods seeing around 39% of their sales from the US, they can look forward to better earnings.
As the landscape of international trade shifts, experts suggest a collaborative approach may define future trade agreements. This deal could be just the beginning, setting the stage for a deeper economic partnership between India and the US. In 2022, trade between the two nations reached $149 billion, highlighting the significant economic ties that exist.
As we observe these developments, it’s clear that lower tariffs present an opportunity for growth across several sectors. This trade deal could pave the way for increased investments and enhanced economic cooperation between the two countries.
Source link
NDTV Profit
