A sharp reduction in US tariffs on Indian goods—from 50% to 18%—under a newly announced India-US trade deal is set to significantly improve prospects for Gujarat’s export-led manufacturing economy. The agreement restores tariff parity for Indian exporters after months of disruption that impacted order flows, margins and capacity utilisation across key industrial clusters in the state.
The rollback offers immediate relief to sectors such as textiles, chemicals, renewable energy and engineering goods, which together form a substantial share of Gujarat’s exports to the United States. The development comes just days after India concluded a comprehensive trade agreement with the European Union, giving Gujarat manufacturers access to two of the world’s largest consumer markets in quick succession.
Textiles and apparel: Inflection point for exports
The textiles and apparel sector is expected to be the biggest and fastest beneficiary of the India-US trade deal.
“This is a clear inflection point for the Indian textile sector,” said Ronak Chiripal, promoter of Chiripal Group. “India now enjoys a cost and competitiveness advantage over key textiles and apparel exporting countries—something we have not seen in years.”
He added that the strongest gains will be seen in value-added segments such as garments, home textiles and technical textiles, where Gujarat manufacturers can compete on design, compliance and speed rather than just volumes. Industry leaders also expect the agreement to strengthen India’s position as a preferred sourcing destination amid the ongoing China+1 diversification, potentially triggering fresh capacity additions and capital investments.
Gems and jewellery: Stability returns to trade flows
The deal is expected to ease near-term uncertainty for the gems and jewellery sector, particularly in bullion-linked exports and pricing.
“The reduction in trade uncertainty could cap safe-haven demand and lead to short-term consolidation in gold and silver prices,” said Prithviraj Kothari, president of the India Bullion and Jewellers Association, adding that a stronger rupee may further soften domestic bullion prices.
According to the Gems and Jewellery Export Promotion Council (GJEPC), the US accounts for 31% (US$ 9.23 billion) of India’s gems and jewellery exports in FY 2024–25. “Tariff cuts lower costs for US importers, provide immense relief to diamond jewellery manufacturers, boost competitiveness and revive demand,” said Kirit Bhansali, chairman, GJEPC. He noted that zero-duty imports for loose diamonds and coloured gemstones will rebuild confidence and support a broad-based recovery in exports.
Chemicals: Margins and capacity utilisation to improve
Gujarat’s chemicals industry—covering bulk chemicals, intermediates and specialty products—is also set to gain from improved export economics. Elevated tariffs had compressed margins and slowed contract renewals over the past year.
Ankit Patel, vice chairman of CHEMEXCIL, said chemicals exports to the US fell by 25–30% after the 50% tariffs were imposed in August 2025. “With tariffs reduced to 18%, we expect exports to surge. Plants producing dyes, dye intermediates, and organic and inorganic chemicals are currently operating at about 60% capacity in Gujarat, which could rise to 80% in the coming months,” he said.
Solar manufacturing: Export momentum returns
Lower US duties are expected to reopen export opportunities for Gujarat’s renewable energy manufacturing ecosystem, including solar modules, inverters and balance-of-system components.
“Solar panel exports to the US from Gujarat are valued at around ₹3,000 crore,” said Kunj Shah, chairman of the energy committee at the Gujarat Chamber of Commerce and Industry (GCCI). “With tariffs reduced to 18%, we expect exports to resume and scale up.”
Electronics and semiconductors: Sentiment boost
While IT services remain largely tariff-neutral, Gujarat’s emerging electronics and semiconductor manufacturing segment is likely to benefit from improved trade sentiment.
“The deal will bring a major improvement in sentiment and encourage closer collaboration with US technology companies through contract manufacturing and joint-development models,” said Sudhir Naik, head (Midwest region) of the India Electronics and Semiconductor Association. Manufacturers of industrial electronics, networking equipment and specialised hardware say the tariff reset enhances the viability of niche exports.
With trade access expanding simultaneously to both the US and EU, industry stakeholders believe Gujarat is entering a renewed growth phase driven by higher exports, fresh investments and deeper integration into global supply chains.
