Winning Bizness Desk
Mumbai.Starting August 7, a 25% tariff will apply on Indian exports to the US. An additional 25% tariff will be imposed from August 27, taking the total duty on some goods to 50%. Indian products, previously taxed at around 10%, will now become significantly costlier in the American market.
Exporters Expect 40-50% Dip in US Orders
According to Ajay Srivastava, founder of Global Trade Research Initiative (GTRI), the sharp increase in tariffs may cut India’s exports to the US by nearly half. However, Indian exporters say they will now target alternative global markets like Europe and ASEAN, especially in sectors like jewellery.
Engineering Goods: India’s Top Export Category Faces 30% Tariff
India exported $19.16 billion worth of engineering goods to the US in 2024. These include steel products, machinery, and auto components. The new tariff increases cost from 15% to 30%. This may reduce exports by 10-15%. Small and mid-sized enterprises, responsible for 40% of this sector's exports, are most vulnerable.
Electronics: Smartphones May Be Hit Next
India exported $14 billion worth of electronics in 2024, with smartphones forming a major chunk. Currently, electronics enjoy tariff exemptions, but if Section 232 tariffs are applied, costs may increase by 25%, reducing demand by up to a quarter. India faces stiff competition from Vietnam and Mexico in this space.
Pharma: Threat of Tariff as High as 250%
In 2024, India exported $10.52 billion worth of pharmaceutical products to the US. While currently exempt from tariffs, Trump has threatened duties up to 250% in the future. This would hurt both countries, as Indian generics supply around 40% of US prescriptions.
Gems and Jewellery: Exporters Rushed Shipments Before Deadline
India exported $9.94 billion in gems and jewellery to the US in 2024. The new tariff on jewellery rises to 31%, and diamonds to 25%. This could lower export demand by 15-20%. Exporters frontloaded shipments to avoid the tariff. Some expect the US to be impacted more than India.
Textiles: Garment Industry Fears Drop in Demand
India exported $10 billion in textiles, including garments and carpets, in 2024. The total tariff on Indian textiles rises to 35%. This could reduce demand by 20-25%, hurting manufacturers in states like Gujarat, Tamil Nadu, and Punjab.
Auto Sector: Auto Parts Face Major Setback
India exported only $8.9 million in cars to the US, but auto parts exports were $2.2 billion in 2024. With a 25% tariff now in effect, this segment will be affected. Competing nations like Mexico and Vietnam offer cheaper alternatives. Indian firms may need to shift focus to Europe and ASEAN.
BOX-
Know about this in Que and Ans:-
When does the new US tariff come into effect?
The 25% tariff begins from August 7, and another 25% hike will be added on August 27, making it 50% in total on selected goods.
Why did the US increase tariffs on Indian goods?
Former President Donald Trump warned that if India continues to trade with Russia, especially in oil and defense, the US will impose penalties. This tariff is a part of that policy pressure.
Which Indian sectors will be most affected?
Sectors like Jewellery, textiles, auto parts, engineering goods, and electronics are expected to face the most impact.
How much does India export to the US annually?
In 2024, India exported around $77 billion worth of goods to the US. These tariffs could lead to a 40–50% fall in exports from some sectors.
Will medicines (pharma) be affected?
Currently, no tariff is imposed on Indian pharma, but Trump has threatened **up to 250% duty** on medicines in future. This could severely disrupt supplies.
How are Indian exporters responding?
Exporters are rushing shipments before the tariff deadlines and also trying to shift to other markets like Europe and ASEAN to avoid losses.
Who will be more affected — India or the US?
Both. Indian exporters may lose orders, but American buyers may face higher prices, especially in affordable drugs, garments, and jewellery.
