The imposition of 25 per cent US tariff will impact about half of India’s exports to America worth over US $86 billion.
Top officials in the Commerce Ministry said the sectors which could bear the brunt of 25 per cent duty include textiles/ clothing ($10.3 billion), gems and jewellery ($12 billion), shrimp ($2.24 billion), leather and footwear ($1.18 billion), animal products ($2 billion), chemicals ($2.34 billion) and electrical and mechanical machinery ($9 billion). They said that about half of the goods exported from India to the US are in the exemption category (like pharma and electronic goods), so the impact will be only on the remaining half.
“More than half of India's exports to the US will not be impacted by the duty. Due to Section 232 exemption of the US, only exports worth about $48 billion would be impacted with these tariffs,” they pointed out, adding that the remaining exports will have little impact on a country with a GDP of about US $4 trillion and a consumer base of 140 crore.
In 2024-25, the bilateral trade between India and US stood at US $131.8 billion ($86.5 billion exports and $45.3 billion imports).
According to think tank GTRI, the 25 per cent tariffs will not be applicable on the exempted categories, including finished pharmaceutical drugs, active pharmaceutical ingredients (APIs) and other key drug inputs; energy products like crude oil, refined fuels, natural gas, coal, and electricity; critical minerals and a wide range of electronics and semiconductors, like computers, tablets, smartphones, solid-state drives, flat panel displays and integrated circuits.
According to an exporter, the apparel sector which exports $5.33 billion worth of goods to the US will be the most impacted.
Sudhir Sekhri, Chairman, Apparel Export Promotion Council (AEPC), said: "We request immediate government intervention to offset this huge setback. Exporters have their back against the wall and will have to sell below cost to keep their factories running and avoid mass layoffs.”
Federation of Indian Export Organizations (FIEO) Director General Ajay Sahai said that the US order provides relaxation for goods in transit and those loaded on ship for final sailing to the US by August 7.
India had a trade surplus (the difference between imports and exports) of $41 billion with America in 2024-25. It was $35.32 billion in 2023-24 and $27.7 billion in 2022-23. India's merchandise exports to the US rose 22.8 per cent to USD 25.51 billion in the April-June quarter this financial year, while imports rose 11.68 per cent to USD 12.86 billion.
Follow us
