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On July 31, 2025, the employee checks the drugs in the pharmacy shop in Hyderabad.
Noah Seel AFP | Gets the image
India’s exports to the US faced a steep tariff by 50% after US President Donald Trump has included an additional 25% of Indian goods for the country’s oil purchases on Wednesday.
Additional responsibilities – set for 21 days – will be drawn up for 25% tariffs for New Delhi from Thursday, according to the executive order.
Analysts warn that the highest US tariffs risk significantly reduce the attractiveness of Indian exports to the US, compared to regional peers.
“India’s attractiveness as a new production center will be very undermined,” said Shilan Shahl Shah, deputy chief economist in the capital. According to him, US costs lead about 2% of India’s GDP, and an additional 25% tariff is “large enough to have a significant impact”.
India considers the US its only largest export partner. Total exports of goods reached about $ 434 billion a year ending March 2025 and almost 20%or $ 86.51 billion of goods were sent to the US, according to the latest official data.
As a result, the drop of exports from the tariff will mean that the economy is increasing to 6% this year and in the next, not by 7% the growth forecast to Trump’s announcement, Shah said.
Goldman Sachs estimates that the potential 50% of the additional tariff on Indian products can drag the total 0.6 percentage point.
The main exports of India to the US are engineering and electronic goods, drugs and pharmaceuticals, gems and jewelry, according to the government.
With a noticeable variance in various fields and little clarity regarding Trump’s plans with tariffs, characteristic, here are the segments that potentially lose the most:
Engineering goods
Engineering goods, including products such as auto parts, power plants and industrial equipment, were the largest exports in India in the US and worldwide, scoring nearly $ 117 billion in March.
About 19.16 billion of these industrial goods, or about 16%, were sold to the United States during this period.
Exports of iron, steel and other products are exported 17.07% of total engineering exportsWhile exports of heavy metals and products made 10.52%. Exports have already been faced with 50% of industry tariffs, which worsen the forecast for the sector, as the same collection is now emerged in its other segments.
Total exports of India’s goods in June jumped by 1.92%, partially managed growth of engineering goodswhich grew by 1.35% to $ 9.5 billion.
Precious stones, jewelry, textiles and clothes
Property stones and jewelry, as well as textiles and clothing are expected, will also be significantly moved by a sudden hiking in the US.
Contribution to precious stones and jewelry 7% of India’s GDP And about 5 million workers are working, the state body reports in July.
About 33% of Indian precious stones and jewelry went to the United States in the 2025 financial year.
Rajes Macht, Executive Chairman of the Indian Rajes Jewelry Producer, said in an interview with CNBC on Wednesday that higher tariffs would be “additional load”, calling for the government’s support for the sector.
Textile-one of the most time-consuming sectors of India, which works directly 45 million workers across the country. Like precious stones and jewelry, about 34% of textile exports last financially headed to the United States.
“Undoubtedly, the new tariff rate will seriously check the determination and sustainability of the textiles and clothing of India, since we will not enjoy a significant differential advantage in many other countries, except Bangladesh, with whom we are fighting for a greater share of the US market,” A statement of July 30Before the last hike was announced.
Electronics
The Indian electronics sector relied on the US for 38% of its exports last fiscal year, making it “most subjected” to the potential risk of release from tariffs, according to Alexandra Herman, a leading economist in the Oxford economy.
India overtook China to become a major exporter Smartphones are sold in the US In the second quarter, after Apple accelerated to transfer the collection of more iPhones to the South Asian nation.
Basically, albeit temporary, repayment for companies such as Apple, Trump announced the release of smartphones, computers and other tariffs in April.
This year’s exports of electronic goods to the United States accelerated, and its exports in March more than double to $ 2.76 billion compared to a year earlier.
Pharmaceutical drugs
While the pharmaceutical sector is currently released from tariffs, Trump threatened the duty to export pharmaceuticals in the US in an interview with CNBC Trump that it would initially bring a “small tariff” to the pharmaceutical and then increase this rate to 250% in a few years.
In the Indian pharmaceutical sector high dependence on US buyers, with its drugs and exports of pharmaceuticals in the United States reaching over $ 10.5 billion a year, ended in March 2025, which is almost 35% of the total supply of the category, according to official data.
“Overall, chemicals in general have slightly less influences in the US, but it masks high dependence on the US pharmaceutical sector,” said Herman, leaving the pharmaceutical sector very vulnerable to Trump’s potential tariffs.
India also exported steel and aluminum to the US, but trade with these goods is taxed through a separate executive order.
Total competitiveness
“The United States can easier to find supplies from alternative import places, but India is much more difficult to diversify from the United States in different sectors,” said Michael Van, Senior Economist Mufg Bank.
India competes against such Europe in pharmaceuticals; Vietnam and Mexico in electronics; Cambodia, Sri Lanka, Bangladesh and Vietnam in Textile; And Israel in gems and jewelry, according to Van. “If these tariff differentials follow, competitiveness in India is likely to be blurred over time,” he said.
Among the export countries that concluded previous transactions with Trump, Vietnam saw that his tariffs had decreased to 20% of 46%. In its latest Trump tariff adjustment, Thailand tariffs up to 19% of the “return” rate of 36%, Bangladesh up to 20% with 35% and Cambodia to 19% with 36%.
About 32% of India’s exports to the US are currently being exempted from tariffs, MUFG estimates, including electronics and pharmaceutical products.
