New Delhi:
As of today, Donald Trump’s 25% tariff hike on Indian goods has officially kicked in — and if you think that’s the end of the story, hold on. Another 25% is coming on August 27. That’s a whopping 50% total tariff on several Indian exports headed to the US — the largest buyer for many of our industries.
While India has seen trade tensions with the US before, this move could trigger one of the most disruptive spells in recent years for Indian exporters, especially those in jewellery, engineering goods, electronics, pharma, and textiles.
Let’s break down how each sector is likely to be hit — and whether India has any game plan to survive this economic shockwave.
1. Engineering Goods: India’s Biggest Export Segment in Trouble
India exported nearly $19 billion worth of engineering products to the US in 2024 — think steel, machinery, auto parts, etc. But now, the tariff has jumped from 15% to 30%, which means a $100 product will now cost $130 in the US.
🔹 Impact: Exports may drop by 10–15%.
🔹 Affected giants: Bharat Forge, L&T, Tata Steel.
🔹 Biggest hit: Small & Medium Enterprises — they form 40% of this sector’s exports.
Expert take: Ajay Srivastava of GTRI warns that overall exports to the US could decline by 40-50% across the board.
“Lakhs of jobs are at risk,” industry bodies fear.
But there’s hope — demand for Indian engineering products is rising in Europe and ASEAN nations like Germany and Malaysia. It’s time India pivots.
2. Electronics: Smartphones in the Crosshairs
India is a major supplier of iPhones to the US. In 2024 alone, we exported $14 billion worth of electronics. Right now, smartphones are exempt from Trump’s new tariffs — but that might change if the US slaps duties under Section 232, citing “national security.”
🔹 What if the 25% tariff applies?
A $100 smartphone will sell for $125 — a price hike that could slash demand by 20–25%.
🔹 Threat: Tough competition from Vietnam and Mexico.
India’s option? Negotiate to keep smartphones and semiconductors out of tariff net. Also, start strengthening the local market and push new homegrown tech brands.
3. Pharmaceuticals: Trump Threatens 250% Tariff!
This could be the most dramatic blow yet. India supplies 40% of US prescriptions, exporting $10.5 billion in medicines last year. Till now, pharma was duty-free. But Trump has hinted at future tariffs of 150%, and even 250% later.
🔹 If 25% is imposed now: A $100 medicine becomes $125.
🔹 Companies on edge: Sun Pharma, Cipla, Dr. Reddy’s, Lupin.
Indian drugmakers now face tough calls — explore Europe & Latin America more aggressively and try to negotiate a trade pact to keep generics affordable.
4. Gems & Jewellery: Booming Exports, But For How Long?
In a rush to beat the August 7 deadline, exports of gems and jewellery have doubled or tripled in recent weeks. India had exported $9.9 billion to the US in 2024, covering nearly half of America’s diamond imports.
🔹 New tariff:
- Jewellery: From 16% → 31%
- Diamonds: From 10% → 25%
🔹 Price hike: A $100 item now costs $131 in the US.
🔹 Expected export drop: 15–20%
🔹 Big names affected: Titan, Rajesh Exports, Kalyan Jewellers.
“America will feel the heat more than us,” says Surat-based industry leader Jayanti Savaliya.
He adds — due to panic buying before the tariff, many US buyers won’t need new orders for the next 3–4 months. But after that, it’s anyone’s guess.
5. Textiles: America’s Wardrobe Might Get Costlier
India shipped $10 billion worth of textiles to the US in 2024 — readymade garments, carpets, cotton yarn. With the new 35% tariff (up from 20%), a $100 shirt now costs $135 in American stores.
🔹 Demand dip expected: 20–25%
🔹 Companies affected: Arvind, Vardhman, KPR Mill
🔹 Main fear: Competition from Bangladesh, Vietnam tightening their grip.
Ashish Gujarati, a textile businessman from Gujarat, says, “The industry is disturbed. No clarity on how long this will last.”
The solution? Push local brands and fast-track the trade deal with the US.
6. Auto Parts: Marginal Car Exports, But Big Component Business at Risk
India barely exports cars to the US — just $8.9 million in 2024 — but it sent $2.2 billion worth of auto components, forming 29% of its global exports in this category.
🔹 Tariff already in place: 25%
🔹 Biggest competitors: Vietnam, Mexico
🔹 Companies affected: Tata Motors, Bharat Forge, Motherson
India’s play? Use the PLI scheme to cut costs and explore new buyers in Europe and ASEAN.
Why Did Trump Do This?
Simple answer: “Reciprocal Tariff”.
Trump says India imposes heavy duties on US goods — so he wants to return the favour. He also isn’t happy with India’s ongoing oil and defence deals with Russia.
This tariff hike is his way of saying: “Play fair or pay the price.”
What About the India-US Trade Deal?
There’s still hope.
A US delegation is visiting India on August 25 for the 6th round of trade talks. Officials are eyeing a breakthrough by September-October, though disputes over agriculture and dairy remain unresolved.
Until then, Indian exporters are walking on a tightrope.
Final Thoughts: Who’s Hurt More?
While Trump’s move is aimed at protecting US interests, it’s a double-edged sword. Many American industries rely heavily on affordable Indian goods. These tariffs might protect some US jobs temporarily — but they’ll also make products expensive for average Americans.
From India’s side, it’s a wake-up call to diversify export markets, support local industries, and urgently seal a trade deal that shields our economy from future shocks.
So, kya lagta hai aapko — will India bounce back stronger, or is this going to hurt more than expected?
