Karnataka is one of the biggest exporters of garments.
| Photo Credit: ALLEN EGENUSE J.
The U.S. government’s decision to reduce import tariffs on Indian goods is expected to significantly boost the competitiveness of Karnataka’s garment exporters, MSMEs, aerospace, and auto components manufacturers, while also benefiting emerging sectors such as electronics, semiconductors, pharmaceuticals, agro-products and Global Capability Centres (GCCs), said industry leaders.
“Karnataka is one of the biggest exporters of garments. The reduction in tariff to 18% is a big boost for garment exporters. India will have the advantage of having lower tariff compared to other countries like Bangladesh, Vietnam, China, and Pakistan,” said K. Ravi, senior vice-president and chairman, International Business Expert Committee, at BCIC.
Industry bodies in Karnataka believe that the tariff relaxation not only improves market access vis-à-vis competing countries, but also shifts the global narrative from cost arbitrage to value-led innovation, R&D and advanced engineering, Mr. Ravi said.
He further said: “The relaxation of tariff to 18% is also a big relief to MSMEs, which had expressed severe concerns regarding reduced profitability and competitiveness. Karnataka being the hub of aerospace components and auto parts, the tariff reduction will improve competitiveness and increase profits. “
Uma Reddy, president, FKCCI, said: “The tariff reduction is the icing on the cake, especially after the Budget focusing on accelerating growth of MSMEs.”
According to industry bodies, the State is also poised to attract higher-end technology work, strengthen GCC expansion beyond Bengaluru.
According to Aravind Melligeri, executive chairman and CEO, Aequs Limited, the tariff reduction would materially improve India’s competitiveness vis-a-via other Asian countries. “With China at 30%; Vietnam at 19%, and India being the lowest in the region at 18%, this will make our products cost effective.”
U.S. President Donald Trump’s decision to cut tariffs comes at a time when recent policy measures and international trade agreements are aligning to accelerate growth, exports and employment across Karnataka’s manufacturing and services ecosystem. As Bangalore hosts over 52% of India’s GCC, the focus now shifts from cutting costs towards leveraging India for higher value technology work such as AI, engineering, R&D and global expansion. This will also encourage companies to set up GCC’s in emerging hubs like Mysuru, Mangaluru etc, as per entrepreneurs.
Published – February 03, 2026 11:49 pm IST
