India–US trade deal: Will advertising spend see a lift?

The US motorcycle legend Harley-Davidson's eye-catching front-page advertisement in a leading Indian daily this Monday did more than promote bikes—it marked the first visible marketing ripple from the US-India interim trade deal. The timing was deliberate. Under the proposed framework, import duties on Harley-Davidson motorcycles have been cut to zero, positioning the brand among the earliest and most prominent beneficiaries of the easing trade ties.

The interim arrangement also outlines steep tariff reductions on premium American cars, with duties set to drop to 30% from earlier levels that reached as high as 110%.

Notably, automobiles stand as India's third-largest advertising category after FMCG and e-commerce, contributing roughly Rs 5,300 crore of ad expenditure in 2025 out of the total Rs 1 lakh crore AdEx, according to the Pitch Madison Annual Report 2025.

In addition, tariffs on exports of textiles, garments, blankets, toys, leather goods, home décor and gems & jewellery have been lowered from 50% to 18%. Moreover, 0% duty access has been secured for silk products, chandeliers, illuminated signs, parts of lamps and more. A joint statement confirmed that India will purchase $500bn worth of US goods over five years.

For India's advertising industry, the symbolism is clear: premium global brands, newly more price-competitive, may be gearing up to intensify brand-building in a market where aspiration-driven categories still depend heavily on mass media visibility.

Experts expect segments like premium US automakers to raise spending to leverage tariff advantages. However, they stopped short of estimating how much growth could be directly linked to tariffs alone.

"The advertising sector is likely to see a boost led by categories such as automobiles, which are directly impacted by tariff reductions," says veteran adman Vikram Sakhuja, chairperson of the Media Research Users Council India (MRUC India).

Echoing that view, Nisha Singhania, co-founder and director at Infectious Advertising, says, "Advertising is always a downstream beneficiary of economic integration -when markets open up, brands have more reason to speak, compete and invest. This deal creates opportunity, but effectiveness will depend on how intelligently brands localise, not how loudly they show up."

Notably, India and the US edged closer to the interim trade understanding last week, offering tariff concessions across a narrow but symbolically significant basket—led by premium mobility and lifestyle products. The arrangement is also believed to offer calibrated relief on select industrial goods, components and consumer products, even as tougher negotiations around digital trade, data flows and services remain outside the present framework.

For New Delhi, the pact is being framed as a trust-building step toward a broader trade agreement; for Washington, better access for flagship American brands into India remains a key commercial priority.

The improving macro narrative has coincided with a shift in foreign investor sentiment. After withdrawing billions of dollars from Indian equities in recent months, foreign portfolio investors (FPIs) have turned net buyers in February, investing over Rs 8,100 crore so far, according to NSDL data. The Nifty 50 and Sensex closed last week higher by 3.5% and 3.6%, respectively, while the broader market has staged a catch-up rally, with midcap and smallcap indices gaining around 4% this month.

Meanwhile, rating agency Moody's has forecast that India's real GDP will grow by 6.4 per cent in FY2026-27, underlining the country's ability to sustain solid economic performance amid global uncertainties. Although the projection is slightly below some domestic estimates, the agency indicated that India is likely to remain among the fastest-growing major economies over the next financial year.

Industry executives said these factors, along with tariff changes, could provide incremental momentum to the advertising market over the next few quarters. Impact to be limited: Vinay Hegde, Madison World

However, others advise caution against overstating the advertising windfall. Vinay Hegde, CEO - Investments (Media) at Madison World, notes that while the trade deal may ease entry for American brands in categories such as processed foods, core agricultural sectors remain shielded. "In ICT, industrial goods and high-tech collaboration areas like semiconductors and data centres, the direct advertising impact will be limited," he says. For Indian brands expanding into the US, the treaty may not automatically lead to higher ad spends back home.

Hegde also highlights that even favourable trade arrangements do not fully liberalise advertising. Data privacy norms, compliance costs, content sensitivities and brand safety constraints will continue to shape cross-border campaigns. Non-tariff barriers and localisation challenges could further temper the pace of marketing investments.

Tariffs alone can't unlock advertising: Nisha Singhania, Infectious According to Nisha Singhania, deeper trade integration will lift media spending, especially in categories that suddenly become more competitive—but the upside will not be uniform or automatic. "We'll see more cross-border brand partnerships and co-created narratives, as brands look to borrow cultural credibility, not just distribution," she says.

"Trade agreements reduce friction on goods and services, but advertising still operates within local data, privacy and platform rules—and those will continue to shape how budgets are deployed. The next big unlock for advertisers won't come from tariffs alone, but from clearer alignment on digital governance and data flows," Singhania adds.