Indian exports to the United States have been hit with one of the harshest trade penalties in recent history– a 50 per cent tariff. Starting 9.31 am IST (12:01 EST) on Wednesday, two-thirds of India’s exports to the US — worth over $60 billion annually — are now in the tariff net. That’s double the current rate of 25 per cent, notified earlier this month.
The trigger, according to US President Donald Trump, is India’s continued purchases of Russian crude and defence hardware. According to the US Department of Homeland Security, the higher rate will apply to all Indian goods that “entered for consumption or withdrawn from warehouse for consumption” on or after this time.
Per the think tank Global Trade Research Initiative (GTRI), India exports around $86.5 billion in goods to the US each year. Roughly two-thirds of this, estimated to me at around $60.2, will face a 50 per cent tariff.
Government estimates are slightly lower, pegging tariffs to impact $48.2 billion worth of exports. Officials have warned that the new duties could make shipments to the US commercially unviable, triggering job losses and slower economic growth.
Worst Affected Sectors
GTRI suggest labour-intensive sectors such as textiles, gems and jewellery, leather goods, food, and automobiles will be hit hardest. The think tank’s founder, Ajay Srivastava, has warned that exports in the affected sectors could collapse by 70 per cent, falling from $60.2 billion to $18.6 billion. Furthermore, the overall shipments to the US could decline by 43 per cent, putting hundreds of thousands of jobs in India’s export hubs at risk.
Amid higher tariffs, India’s products might lose competitiveness, potentially benefiting countries like China and Vietnam, as tariffs imposed on India are also higher than those on other Asian countries such as China (30 per cent), Vietnam (20 per cent), Indonesia (19 per cent) and Japan (15 per cent).
Shrimps: India exported $2.4 billion worth of shrimps to the US in FY2025, accounting for 32.4 per cent of total shrimp exports. The US is India’s top market for farmed shrimp, particularly peeled, deveined, cooked, and breaded varieties. The sector is likely to see total tariffs soar to 60 per cent, collapsing farm-gate prices in Andhra Pradesh and threatening the survival of processing hubs in Visakhapatnam and West Godavari, while competitors like Ecuador, Vietnam, Indonesia, and Thailand seize market share, according to GTRI.
Gems and Jewellery: India’s exports of $10 billion to the US made up 40 per cent of India’s global exports in this sector. Tariffs will surge from 2.1 per cent to 52.1 per cent, risking job losses in Surat, Mumbai, and Jaipur, where the industry employs millions in cutting, polishing, and manufacturing.
Textiles and Apparel: India’s Textiles and apparel exports to the US in FY 2025 were $10.8 billion. Apparels alone account for $5.4 billion in exports to the US. The share of the US in India’s apparel exports was 35 per cent. Tariffs rise from 13.9 per cent to 63.9 per cent, wiping out any price advantage. This will impact clusters in Tiruppur, Noida-Gurugram, Bengaluru, Ludhiana, and Jaipur, with Bangladesh, Vietnam, Mexico, and CAFTA-DR countries expected to replace Indian suppliers.
Carpets: India’s exports to the US in FY 2025 were $1.2 billion, with Washington having a 58.6 per cent share in Indian carpet exports. Tariffs climb from 2.9 per cent to 52.9 per cent, threatening artisanal livelihoods in Bhadohi, Mirzapur, and Srinagar, while Turkey, Pakistan, Nepal, and China gain.
Handicrafts: India’s Handicraft exports to the US in FY 2025 were $1.6 billion, with Washington having a 40 per cent share in Indian exports.This risks factory closures across Jodhpur, Jaipur, Moradabad and Saharanpur, with Vietnam, China, Turkey, and Mexico filling the gap.
Leather and Footwear: India’s leather goods and footwear exports to the US stand at $1.2 billion. It will now be subject to the full 50 per cent tariff, losing ground to Vietnam, China, Indonesia, and Mexico, threatening Agra, Kanpur, and Tamil Nadu’s Ambur-Ranipet clusters.
Agriculture and Processed Food: India exports basmati rice, tea, spices, and other farm products worth $6 billion to the US. They will now be subject to the full 50 per cent duty, enabling Pakistan, Thailand, Vietnam, Kenya, and Sri Lanka to take over the US demand.
Tariff-Exempt Products
Around 30.2 per cent of India’s exports– worth $27.6 billion– will continue to enter the US market duty-free. Major product categories under this are pharmaceuticals and active pharmaceutical ingredients (APIs). They make up 56 per cent of all exempt exports from India.
Moreover, electronics, including smartphones, switching and routing gear, integrated circuits, unmounted chips, wafers for diodes, and solid-state storage devices, have also been exempted.
Refined light oil, gasoline, and aviation turbine fuel, books, brochures, plastics, ferromanganese, ferrosilicon manganese, ferrochromium, computing gears, Unwrought antimony, nickel, zinc, chromium, tungsten, platinum, palladium, gold dore, gold coins, technically specified natural rubber, coral, echinoderms, and cuttlebone have also been expemted.
