New Delhi

Tariff relief in trade with the United States (US) opens up an export opportunity of nearly USD 50 billion for India, particularly in labour-intensive sectors that had come under pressure in recent months, Confederation of Indian Industry (CII) President Rajiv Memani said on Tuesday.

"With the US being India's largest trading partner, easing of tariff-related uncertainty is expected to arrest the decline in key export segments such as garments, leather, gems and jewellery, fisheries and auto components, while also strengthening the broader India-US trade and investment relationship," he said.

Memani noted that the United States, the world's largest economy, is also India's largest trading partner, with total Indian exports to the US estimated at around USD 80-90 billion annually. Of this, nearly 50-60 per cent, roughly USD 50 billion, comes from labour-intensive sectors such as garments, leather, fisheries, gems and jewellery, auto components and engineering goods.

"These sectors had started feeling the impact of tariffs over the last few months, and because they are highly labour-intensive, the impact was also being felt on employment," Memani said.

With India's tariff level now becoming more competitive at around 18 per cent compared to other countries, Memani said the move opens up opportunities for labour-intensive sectors to regain momentum. "At the very least, the decline that had begun should get arrested, and hopefully these sectors can return to the growth rates they were experiencing earlier," he added.

Memani also expressed optimism that the easing of tariff-related uncertainty could pave the way for a more comprehensive India-US free trade agreement (FTA) over the next 12 months.

"While India-US investment flows in areas such as technology, artificial intelligence and data have remained strong, other areas of trade and investment had slowed due to the tariff overhang," he said.

"With this overhang going away, one major perceived risk is removed. This can reignite overall trade and investment between India and the US," he said, calling the opportunity "massive" given India's growth trajectory, competitiveness and status as the fastest-growing major economy, alongside the scale of the US market.

Highlighting the strategic dimension, Memani described India-US ties as a highly complementary relationship between two democracies, with significant potential for expanding trade and investment.

He added that improved market access is particularly important for the success of initiatives such as Make in India.

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"Labour-intensive manufacturing depends heavily on large export markets. When markets open up whether the EU, where we have concluded a trade deal, or the US, where a trade agreement exists and an FTA is hoped for it strongly encourages manufacturing in India," he said.

Memani further said the broader market access will enhance India's competitiveness and give a significant boost to labour-intensive manufacturing, reinforcing the Make in India push and supporting employment growth.