Capital goods dominate India–US import plan, limiting impact on jobs-heavy sectors

Subscribe to enjoy similar stories. New Delhi: As India and the US approach the bilateral trade agreement, the import commitments are key to its domestic impact. Since most imports are capital-intensive and strategic, experts believe the deal will avoid pressuring India’s labour-intensive sectors, even as trade increases.

India plans to import about $500 billion worth of goods from the US over the next five years. Both sides aim to boost bilateral trade to $500 billion from the current $132 billion, which includes $86.5 billion in exports and $45.6 billion in imports in FY25, as per the joint statement on 7 February. India’s labour-intensive sectors, including textiles, gems, leather, marine products, rice, fruits, vegetables, and plantation exports like tea, coffee, spices, and cereals, contributed approximately $25.5 billion to US exports in FY25, according to the commerce ministry.

Labour-intensive sectors accounted for nearly 30% of India’s total goods exports to the US in FY25. This assumes significance as India’s key labour-intensive export sectors—led by textiles, gems and jewellery, leather, agro-processing, plantations, and marine products—employ about 75-90 million people. Trade experts, economists, and officials said this structure shields sectors like textiles, gems, jewellery, leather, seafood, and agro-products from import-related pressure, while enabling India to fulfill US demands in energy security and strategic cooperation.

This design reflects a conscious balancing act. Madhavi Arora, chief economist at Emkay Global Financial Services, said the much-discussed plan to import $500 billion worth of goods from the US over five years should be seen more as a strategic signal than a rigid trade outcome. “The