New U.S. Tariffs and India
Everything You Need to About Trump Tariff 50% on India and Sector-wise Breakdown
On July 31, 2025, U.S. President Donald Trump announced a 25% import tariff on all Indian goods starting August 1. The move is not limited to a few items. It is a blanket tariff on nearly $87 billion worth of Indian exports to the U.S.
On August 6 Trump again signed an executive order penalizing India for importing oil from Russia, increasing the effective tariff rate on the country to 50 percent on $60.2 Billion worth of Indian exports, up from 25 percent as per the previous order issued on July 31. Roughly 17.90% of India’s total goods exports go to the U.S., so even a 5–10% drop could translate to billions in lost revenue.
This 50% tariff isn’t just about trade, it’s about leverage. There’s a good chance the U.S. and India will strike a deal by year’s end, with tariffs serving as bargaining chips each side uses to secure better terms.
Tariff Structure Breakdown –Sector Wise:
India-U.S. Trade Assessment –Sector Wise:
Low Impact Sectors –Pharmaceuticals & Smartphones
Sectors like pharmaceuticals and smartphones are currently exempt from the increased tariffs and will likely remain so, since roughly 40% of U.S. pharmaceutical imports come from India. India has become a cornerstone of Apple’s global supply chain: data from Counterpoint Research shows that 71% of iPhones sold in the U.S. between April and June were made in India, up sharply from 31% a year earlier.
High Impact Sectors –Textile, Apparel, Jewelry, Shrimp
The United States accounts for nearly 28% of India’s textile and garment exports, making it one of the most critical markets. India exported over $10.5 billion of textiles to the U.S. in FY25. Companies such as Welspun Living, Trident, and Arvind Ltd. depend heavily on American demand for cotton towels, bedsheets, and apparel.
India’s Three Prong Strategy—Resilience & Diversification
Fast-Track FTAs
India is negotiating Free Trade Agreements (FTAs) with the EU, Chile, and Peru, Oman, New Zealand. The India-UK FTA are unlocking new markets for textiles, electronics, and pharmaceuticals. India and the Eurasian Economic Union (EAEU) signed the term.
Major Reform & Export Promotion Push
The government may roll out ₹2,250 crore export promotion mission soon. The mission may include components, such as easy credit schemes for MSME and e-commerce exporters, facilitation of overseas warehousing, and global branding initiatives to tap emerging export opportunities
Export & Import Diversification
The government is working on measures to boost India’s exports, including targeting 50 countries in regions such as the Middle East and Africa, amid the heavy tariffs imposed by the US on Indian goods, an official said on Monday. These 50 countries account for about 90 per cent of India’s exports.
Conclusion- India’s Role in Global Trade
2025 is shaping up to be a pivotal year for global Trade. India is one of the fastest growing economies. During global pandemic India emerged as one of the primary beneficiaries’ post-pandemics, as companies diversify their supply strategies with approaches like “China+1.” India is well-positioned to fill market gaps and serve as a competitive alternative. Over the past three years, India has shifted to a more proactive trade negotiation strategy.
It has concluded major Free Trade Agreements (FTAs), including the India-UAE FTA, India-UK FTA and Close to concluding on going Agreements like India-Australia FTA, and. Amid global trade turbulence including events like Trump Tariffs.
While these Tariff might slightly sting temporarily, India is poised to overcome these hurdles by Diversifying Exports, Fast Tracking FTAs, Major Reform & Export Promotion Push
India is reportedly close to a trade deal with the United States by the End of this year. Experts speculate that India is strategically like to gain competitive tariff over its competitors in the End.
