.A broad agreement could nearly double India’s exports of goods to the US — its largest market overseas accounting for 19.3% of total exports — within a decade, and increase gross domestic product by 0.6%, economists Abhishek Gupta and Eleonora Mavroeidi wrote in a report Friday. Including services, overall exports to the US should rise 64%, the report said.
Most of the export gains would come from textiles and light manufacturing goods, such as furniture, toys and other consumer goods, the economists said, adding the trade deal would “mark an inflection point” for the domestic manufacturing sector.
Indian and US officials are racing to clinch a deal before a July 9 deadline for the higher tariffs.
With the Trump administration imposing hefty tariffs on China and Vietnam, a trade deal that levies 10% tariffs on India would make the South Asian nation a draw for businesses seeking to relocate or diversify supply chain, the economists said.
If no trade deal is reached and India is subjected to higher reciprocal tariffs of 26%, the nation could lose more than a third of its direct exports to the US and its GDP could take a 0.7% hit, the economists said. India was among the first nations to initiate trade talks with the US this year, with Prime Minister Narendra Modi making sweeping concessions to appease the White House. However, in recent weeks, both sides have hardened their stance on sectors such as agriculture.
