Karnataka is one of the largest exporters of garments. | Photo credit: ALLEN EGENUSE J.
The US government’s decision to reduce import duties on Indian goods is expected to significantly boost the competitiveness of Karnataka’s garment exporters, MSMEs, aerospace and auto component manufacturers, while benefiting emerging sectors such as electronics, semiconductors, pharmaceuticals, agri products and Global Capability Centers (GCC), industry leaders said.
“Karnataka is one of the largest garment exporters. The reduction in duty to 18% is a big boost for garment exporters. India will have the advantage of lower duty 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 tariff liberalization not only improves market access vis-à-vis competing countries, but also shifts the global narrative away from price arbitrage to value-driven innovation, R&D and advanced engineering, Mr. Ravi said.
He further said, “Tariff relaxation to 18% is also a big relief to SMEs who have expressed serious concerns about reduced profitability and competitiveness. Karnataka, being a hub for aerospace components and auto parts, the reduction in tariffs will improve competitiveness and increase profits.”
Uma Reddy, President, FKCCI, said, “The reduction in customs duties is the icing on the cake, especially after the budget focuses on accelerating the growth of small and medium enterprises.
According to industry bodies, the state is also poised to attract cutting-edge technology and boost the GCC’s expansion beyond Bengaluru.
According to Aravind Melligeri, Executive Chairman and CEO of Aequs Limited, the reduction in tariffs would substantially improve India’s competitiveness vis-à-vis other Asian countries. “With China at 30%, Vietnam at 19% and India the lowest in the region at 18%, this will make our products more efficient.”
US President Donald Trump’s decision to reduce tariffs comes at a time when recent policy measures and international trade agreements are converging to spur growth, exports and employment across Karnataka’s manufacturing and services ecosystem. With Bangalore hosting more than 52% of India’s GCC, the focus is now shifting from cost reduction to leveraging India for higher technology work such as AI, engineering, R&D and global expansion. This will also encourage companies to set up GCCs in emerging hubs like Mysuru, Mangaluru etc., according to entrepreneurs.
Published – 03 Feb 2026 23:49 IST
