UP’s exports, MSMEs, and industrial clusters will receive structural support from Indo-US trade agreement: CM Yogi

Uttar Pradesh Chief Minister Yogi Adityanath has said that under the visionary leadership of Prime Minister Narendra Modi, India has reached a framework for an interim trade agreement with the United States.

“This framework expands global opportunities for Indian exporters and MSMEs, while simultaneously safeguarding India’s agriculture sector, food security, the interests of our farmers and the strength of the rural economy”, he claimed.

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Along with strengthening ‘Make in India’, it will create employment opportunities for women and youth, he added.

In a statement on Saturday night, the CM said, “the joint statement issued under the proposed bilateral trade agreement between India and the United States has given an important policy signal for Uttar Pradesh’s export-based economy.”

He said its impact will not be limited to trade figures, but will affect sectors such as textiles, leather, Agro-based industries, MSMEs and industrial manufacturing, where Uttar Pradesh’s participation is significant at the national level.

“The Bhadohi-Mirzapur carpet sector, which is globally known for handmade carpets, has long been facing challenges of price competitiveness in the US market due to high import duties. After the tariff reduction, improvement in the cost structure of these products is expected, which could boost export orders and long-term supply contracts,” he said. Similarly, the silk and handloom sector of Varanasi, which is stated to receive zero duty benefits under the joint statement, may gain better access to the US market amid limited but stable demand, he added.

This tariff framework is also considered important for powerloom and ready-made garment based production units of eastern Uttar Pradesh. Reduction in duties on products such as ready-made garments, man-made and cotton textiles could provide these units with comparative advantages in cost and pricing vis-à-vis countries like China, Vietnam and Bangladesh.
According to experts, if the required improvements are made in logistics and quality standards, this tariff relief could help make exports from Uttar Pradesh’s textile and carpet sector more stable and competitive.

The proposal in the India-United States tariff joint statement to limit US import duties on leather and footwear products from an average of 50 percent to 18 percent is being considered significant for Uttar Pradesh’s traditional leather clusters.

Regions such as Kanpur and Agra, where a large share of production is concentrated in MSMEs and artisan-based units, have long faced competitiveness challenges in the US market due to high tariffs and cost pressures. Kanpur’s leather industry is known for finished leather, footwear and related components, while the Agra footwear cluster is primarily export-oriented. The proposed tariff reduction is expected to lower overall export costs of these products, making pricing more competitive.

Units associated with home décor and handicrafts in regions such as Meerut, Saharanpur, Moradabad, Bulandshahr and Gautam Buddh Nagar have long been active in exports, but due to high tariffs and cost pressures, their competitive position in the US market remained limited. Tariff reduction is expected to lower overall export costs of these products, making pricing more viable in the US market.

Uttar Pradesh is the country’s leading mango-producing state and also plays a leading role in the production of potatoes, tomatoes, peas, green vegetables and spices. Until now, access of these products to the US market remained limited due to processing costs, tariffs and intense price competition.

Mega Food Parks, private processing units and Farmer Producer Organisations (FPOs) established in the state can become part of the export chain through this framework. This is expected to promote value-added exports instead of raw agricultural produce.

The proposal in the India-United States tariff joint statement to provide zero or minimal additional duty on industrial products such as pharmaceuticals, generic medicines, Active Pharmaceutical Ingredients (API), machinery and auto components is being considered an important indicator for Uttar Pradesh’s industrial development. This provision has come at a time when the state government is prioritising industrial investment, cluster-based production and export-oriented manufacturing.

Pharma and manufacturing clusters are rapidly developing in Noida-Greater Noida, Ghaziabad, Lucknow and the Bundelkhand region. Tariff relief could provide these units with better access to the US market and an opportunity to increase the share of Indian products in global supply chains. Especially for generic medicines and API-related products, this framework could form the basis for export stability and long-term contracts.

In the machinery and auto components sector, tariff relief is expected to improve cost competitiveness and help establish Uttar Pradesh’s units as alternative suppliers. According to experts, the tariff advantage available to India compared to China and other Asian countries could make Uttar Pradesh’s industrial regions viable manufacturing and sourcing destinations for US companies.

The joint statement has expressed commitment regarding imports and technical cooperation in semiconductor inputs, data centre hardware, cloud infrastructure and advanced digital technologies. This could have a direct impact on Uttar Pradesh’s emerging IT, electronics and data centre ecosystem, especially in Noida, Greater Noida and the Yamuna Expressway region.

Clarity in tariffs and technical cooperation is expected to improve the cost structure of data centre projects in the state and accelerate investment decisions. Uttar Pradesh is already attracting large-scale data centre investments, and this framework could help connect these projects to the global technology supply chain.

The India-United States tariff joint statement clearly records that protection of farmers’ interests will remain paramount in sensitive sectors such as agriculture, dairy, grains, millets, spices, poultry and genetically modified food. According to the document, the process of market opening will be kept phased, limited and balanced, so that import liberalisation does not adversely impact local farmers, livestock rearers and small producers.

For an agriculture-dominant state like Uttar Pradesh, this provision holds special significance, where a large population is directly or indirectly dependent on farming, dairy production and animal husbandry.