India-US trade deal to boost exports, but energy, metals remain concerns: SBICaps

New Delhi: While the framework for the India–US interim trade agreement is broadly positive for the economy, it could push up India’s energy import basket and affect metals, according to a report by investment bank SBI Capital Markets (SBICaps).

Several export-oriented sectors, including textiles, leather, plastics, rubber, organic chemicals, and seafood, are set to benefit from duty-free access for nearly half of India’s exports to the US, the report said.

“While an overall positive for the economy, the impact of the deal on the cost of the Indian energy import basket, besides the impact of items in Section 232 (mainly metals), is yet to be fully felt,” the report said.

The concern comes amid US claims that India has committed to reducing purchases of Russian oil and would buy more from the US and Venezuela. Experts suggest that diversion from Russian oil may impact India's crude import cost as Russian oil is now available at a discount of $8-12 per barrel.

Ratings agency Icra Ltd estimates that replacing Russian crude with market-priced oil would increase India’s import bill by less than 2%.

The report said that by the end of 2025, India faced some of the highest US tariffs among emerging markets, at about 50%. That changed in 2026, with India signing trade agreements with both the US and the European Union.

The US has agreed to 18% tariffs on most items, with the removal of the punitive 25% levy imposed on Russian oil imports by India.

Commerce and industry minister Piyush Goyal had said on Saturday India is set to gain zero-duty access for goods worth around $44 billion, nearly half of its merchandise exports to the US, under the first phase of the India–US bilateral trade agreement.

Goyal said India has ensured carefully crafted exemption lines for products including dairy items, soyameal, lentils, cereals and millets, fruits like bananas and strawberries, green peas, honey, ethanol for fuel blending and genetically modified (GM) foods.

Sector-specific tariffs imposed under Section 232 will continue for steel, aluminium and copper at 50%. In auto components, the existing 25% tariff will be eliminated on half the import volume, while the remaining half will continue to attract the same duty.

Goldman Sachs Research on Monday revised its 2026 GDP estimate for India by 20 basis points to 6.9%. It said the reduced tariffs on Indian exports under the framework for the India-US interim trade agreement would boost the economic growth of the country.

On the budget, the SBI arm said it recognised that further measures were needed to boost the manufacturing segment, which has shown green shoots in the previous few quarters.

Noting that after a lull period, capex allocations to both roads and railways saw a healthy boost in FY27, it said: “The effective capex has grown at a sharper pace vs union capex, indicating that while the Union is willing to shoulder the responsibility of the core sectors, it expects the States and private bodies to shoulder the burden of capex in other sectors.