An employee inspected the drug stocks at a pharmacy store in Hyderabad on July 31, 2025.
Noah Seram | AFP | Getty Images
India’s exports to the United States face 50% tariffs after U.S. President Donald Trump filmed a 25% tax on buying Indian goods from Russia on Wednesday.
Additional responsibilities (which will take effect within 21 days) will be stacked above New Delhi’s 25% tariffs as of the U.S. on Thursday, according to data from the Executive Order.
Analysts warn that higher U.S. tariffs could significantly reduce the charm of India’s exports compared to regional peers.
“India’s appeal as an emerging manufacturing hub will be severely damaged,” Shilan Shah, deputy emerging market economist at Capital Economics, said in a note. He estimates that U.S. spending accounts for about 2% of India’s GDP, with an additional 25% tariff “large enough to have a significant impact.”
India sees the United States as its largest export partner. The year ended March 2025 Product worth $86.51 billion According to the latest official data, it was shipped to the United States.
Shah said the decline in exports due to tariffs would mean nearly 6% growth this year and next, rather than the previous 7% growth forecast announced by Trump.
According to Goldman Sachs estimates, potential additional tariffs on Indian products could bring their GDP to 0.6 percentage points.
India’s main exports to the United States are engineering and electronics, medicines and medicines, gems and jewelry, according to government data.
With significant differences between industries and clear differences in plans for specific tariffs on specific areas, here are the biggest areas that are likely to be lost:
Engineering goods
Engineering products, including automotive parts, power equipment and industrial machinery, have been India’s exports to the United States and globally, which was nearly $117 billion in India in the year to March.
During this period, about $19.16 billion in industrial supplies (about 16%) were sold to the United States.
Export of iron, steel and other products 17.07% of total engineering exportsrather than existing metals and products exports contributed 10.52%. Steel exports are already facing 50% sector tariffs, worsening the outlook for the sector, as the same tax is now imminent in its other segments.
Total cargo exports in India rose 1.92% in June, partly because The rise of engineering productsup 1.35% to $9.5 billion.
Gems, Jewelry, Textiles and Clothing
The sudden rate hike in U.S. tariffs are expected to cause shock to the gemstones, jewelry, and textiles and clothing sectors.
Contributions to the gemstone and jewelry industry 7% of India’s GDP According to a July report from state-supported industry agencies, about 5 million workers were employed.
In 2025, approximately 33% of India’s gems and jewelry exports are used in the United States.
Rajesh Mehta, executive chairman of Indian jewelry maker Rajesh Exports, said in an interview with CNBC on Wednesday that higher tariffs would be “an additional burden”, while calling on the government to support the industry.
Textiles are one of the labor-intensive sectors in India and are directly adopted 45 million workers nationwide. Similar to gems and jewelry, about 34% of textile exports went to the United States in the last fiscal year.
“The new tariff rate will undoubtedly test the determination and resilience of Indian textile and garment exporters as we will compete with many other countries besides Bangladesh, which is a larger U.S. market, relative to many other countries, and we are competing with us for a larger U.S. market,” he said. Statement dated July 30Before announcing the latest responsibilities.
Electronics
Oxford economist Alexandra Hermann said India’s electronics sector relied on 38% of the U.S. export year in the last fiscal year, making it the “most exposed,” according to Oxford economist Alexandra Hermann, a potential risk to tariff exemptions.
India surpasses China to become Smartphones for sale in the United States In the second quarter, Apple accelerated the transfer of more iPhone assembly to South Asian countries.
Trump offered Apple and other companies temporary probation, and announced in April that it would exempt smartphones, computers and other electronic goods from tariffs.
India’s electronic goods exports to the United States have accelerated compared to a year ago, with exports more than doubled in March alone to $2.76 billion.
drug
Although the drug department is also exempt from tariffs at the moment, Trump threatened his duty to U.S. exports in an interview with CNBC Trump, saying he would initially impose a “small tariff” on Pharma and then raise that rate to as high as 250% in a few years.
According to official data, India’s pharmaceutical industry is highly dependent on U.S. buyers, with its drugs and drugs exported to the U.S. in the year ended March 2025, accounting for nearly 35% of the total shipment in the category.
“The overall exposure of chemicals (Indian) is small, but this masks the U.S. dependence of the senior pharmaceutical sector,” Herman said.
India also exported steel and aluminum to the United States, but trade in these commodities was taxed through separate executive orders.
Overall competitiveness
“The U.S. can get supplies more easily from alternative import locations, but it’s hard for India to diversify across different sectors from the U.S.,” said Michael Wan, senior economist at MUFG Bank.
India competes with people like Europe in medicine; Vietnam and Mexico electronics; Cambodia, Sri Lanka, Bangladesh and Vietnam in textiles; according to Wan, Israel’s gems and jewelry. “If these tariff differences are stable, India’s export competitiveness could be eroded over time,” he said.
Among export-dependent countries that conduct preliminary deals with Trump, Vietnam’s tariffs have dropped from 46% to 20%. In the latest tariff adjustments, Trump also reduced Thailand’s tariffs from the “countdown” tariff level of 36% to 19%, Bangladesh from 35% and Cambodia from 36% to 20%.
According to MUFG’s estimates, approximately 32% of India’s exports are tax-free, including electronics and pharmaceutical products.
