India's shrimp, carpets, medical devices, and gold jewellery exports are set to face significant challenges following the United States' decision to impose a 27 per cent import tariff. However, industries such as electronics, textiles, and pharmaceuticals may gain a competitive advantage in the American market.
On April 2, US President Donald Trump announced sweeping tariff measures aimed at reducing the trade deficit and bolstering domestic manufacturing.
The policy introduces a universal 10 per cent tariff on all imported goods from April 5, which will increase to 27 per cent from April 9. Over 60 countries, including India, will be impacted by these changes.
Shrimp exports are expected to be among the hardest hit, as the US remains India's largest market for the product.
With existing anti-dumping and countervailing duties already in place, the new tariff will make Indian shrimp significantly less competitive. India exports around 40 per cent of its total shrimp production to the US, with Ecuador and Indonesia emerging as strong competitors.
In the 2023-24 fiscal year, India exported 7,16,004 tonnes of frozen shrimp, with the US importing nearly 3,00,000 tonnes.
The carpet industry will also be affected, given that the US is India's largest importer in this sector, accounting for nearly USD 2 billion in purchases during 2023-24. Similarly, India's gems and jewellery sector, which exported products worth USD 32.85 billion globally, will be impacted.
The US accounted for approximately USD 10 billion of these exports, including diamonds, gold, silver, and lab-grown diamonds. The tariff increase could raise import duties on loose diamonds to 20 per cent from the current zero per cent, while duties on gold jewellery may rise to 5.5-7 per cent.
Kama Jewellery Managing Director Colin Shah described the tariffs as a major setback, particularly for the jewellery sector, which heavily relies on the American market.
India's medical device industry is also expected to face challenges, as the new tariffs will apply reciprocally. In 2023-24, India's medical device exports to the US stood at USD 714.38 million, while imports from the US into India were significantly higher at USD 1.52 billion.
Despite these setbacks, certain industries are likely to benefit from the new tariff regime. The apparel sector is expected to gain an edge, as India’s major competitors—including China, Bangladesh, Vietnam, Cambodia, and Sri Lanka—will face even higher US tariffs.
Additionally, the electronics industry, which exported USD 30 billion worth of goods in 2023-24, will maintain its strong presence in the US market. The US accounted for 33 per cent of India's total electronics exports, making it the largest buyer.
The pharmaceutical sector, which exports approximately USD 9 billion worth of goods to the US, has been exempted from the tariff hikes. Indian generics have played a crucial role in reducing healthcare costs in the US, providing an estimated USD 219 billion in savings in 2022 alone.
Over the past decade, these medicines have contributed USD 1.3 trillion in cost reductions, with expectations of similar savings in the coming years.
Follow us
