Electricals to pharma: Top 15 sectors may add $97 billion to India’s US exports, SBI Research says

India’s merchandise exports to the United States could rise by over $100 billion annually following the new bilateral trade agreement that brings reciprocal tariffs down to 18%, according to a report by SBI Research.

The report said the tariff reduction presents a “golden opportunity” for Indian exporters to significantly increase their market share in the US.

SBI Research estimates India’s annual goods exports to the US could increase by about $100 billion, while imports may rise by around $55 billion. This could push India’s total trade surplus with the US beyond $90 billion annually from about $41 billion in FY25.

The preliminary estimates suggest exports of the top 15 product categories alone rising by about $97 billion a year, and total potential comfortably crossing the $100-billion mark.

SBI Research noted that India now has one of the lowest tariff rates among major Asian economies, restoring competitiveness for Indian goods across key sectors such as electrical machinery, pharmaceuticals, engineering products, textiles, chemicals, gems and jewellery, leather, seafood and automobiles.

Currently, India accounts for just about 3% of total US imports, despite a massive demand-supply gap of nearly $3 trillion in the American market.

With lower tariffs, Indian exporters are better positioned to bridge this gap, particularly in high-value segments like electrical machinery, mechanical equipment, vehicles, organic chemicals and apparel, the report said.

According to SBI Research, the top 15 product categories expected to drive the export surge include electrical machinery and equipment, nuclear reactors and mechanical appliances, vehicles and auto components, pharmaceutical products, gems and precious stones, mineral fuels, organic chemicals, articles of iron and steel, apparel (both knitted and non-knitted), made-up textile articles, plastics and plastic products, miscellaneous chemical products, optical and measuring instruments, and fish and other aquatic products.

These product categories alone could add nearly $97 billion annually to India’s exports to the US, with overall export potential crossing $100 billion after accounting for other items.

The net impact on India’s GDP is estimated at around 1.1%, with additional foreign exchange savings of nearly $3 billion a year due to reduced import duties, the report said.

The study also pointed to opportunities for India to substitute some electronics imports from China through value addition and onward exports to the US.

SBI Research said export traction following the deal could also improve credit flows to export-oriented sectors such as engineering, chemicals, textiles and gems and jewellery, helping support India’s broader target of achieving $1 trillion in merchandise exports by 2030.