US President Donald Trump has imposed the steepest American tariffs in a century, escalating his trade war and sending ripples through the global economy. The sweeping measures, which include at least 10% tariff on all exporters and even more taxes on 60 nations, are aimed at addressing what he calls unfair trade imbalances.
India has been hit with a 26% tariff on its exports to the US, placing it among the hardest-hit countries.
However, India will be able to navigate the tariff challenges smoothly, Bernstein said in a report. The report said India is more likely to negotiate with the US rather than escalate a trade dispute. While there may be some initial negative market reaction, it expects the economy to recover in the second half of the year.
PHD Chamber of Commerce and Industry said India's GDP will take only 0.1% hit in short-term from Trump tariff thanks to 'aatmanirbharta'.
Hemant Jain, President of PHDCCI, said India’s strong domestic manufacturing and ongoing government support through strategic policies such as production-linked incentive (PLI) schemes, Make in India, and Atmanirbhar Bharat will help maintain the country’s economic resilience.
India is not badly impacted by the tariffs, ASSOCHAM President Sanjay Nayar said, adding that the Indian economy is more inward-looking compared to other Asian markets.
Trump's decision to impose higher reciprocal tariffs on several Asian and European countries, including China, Vietnam, Taiwan, Thailand, and Bangladesh, could give India a chance to strengthen its position in global trade and manufacturing, said GTRI Founder Ajay Srivastava.
Srivastava said that Indian exports of steel, aluminium, and auto-related goods will face a 25% tariff, while pharmaceuticals, semiconductors, copper, and energy products will not be taxed.
Also Read: Trump's 26% tariffs put pressure on India. Is New Delhi ready for the impact?
Trump announces sweeping tariffs, markets on edge
Trump announced on Wednesday that the US would impose a universal 10% tariff on all imports, with additional higher levies on specific countries. The new duties target some of America’s biggest trading partners, with China now facing tariffs exceeding 50% on many goods, while the European Union, Japan, Vietnam, and others have also been hit with significant charges.
The move has deepened fears of retaliation from affected countries, with economists warning of potential disruptions in global trade flows. Investors are also jittery about the impact on US economic growth, as businesses and consumers brace for price increases.
Also Read: India to face 'discounted' 26% tariff from US
India hit with 26% tariff, higher than Japan and South Korea
Despite Trump’s strong personal ties with Prime Minister Narendra Modi, India was not spared from the tariff hikes. The new 26% levy on Indian imports is among the highest imposed on any major US trading partner.
India’s new tariff rate is slightly higher than the 20% imposed on the European Union, 24% on Japan, and 25% on South Korea. However, it remains well below the steep 54% rate imposed on China, which includes a newly announced 34% reciprocal tariff on top of an existing 20%. Vietnam, another key manufacturing hub, has been hit with a 46% tariff, while Thailand and Indonesia face 36% and 32% tariffs, respectively.
While some developed nations such as the UK (10%) and Switzerland (34%) have lower tariffs, they do not compete directly with India in key export categories. Among Asian economies, only Malaysia, which faces a 24% tariff, competes with India in some sectors.
Announcing the tariffs, Trump described Modi as a "great friend" but defended the measures as a necessary response to India’s trade policies. "You're a friend of mine, but you're not treating us right," he said. The US president called the new tariffs a "discounted reciprocal tariff" meant to counter India's high duties on American goods.
Also Read: Trump to Modi: ‘You’re not treating us right’ as US hits India with 26% tariff
Trup tariffs: Some industries may benefit
The tariffs mark a significant setback for India, which had sought to avert such measures by offering concessions on trade issues important to the Trump administration. Key export sectors, including textiles, engineering goods, electronics, and gems and jewellery, are expected to bear the brunt of the tariffs.
However, government officials and industry leaders have sought to downplay concerns, suggesting that India is still better placed than some of its competitors. "It is a mixed bag and not a setback for India," a senior official told the Press Trust of India.
Pharmaceuticals exempt from Trump tariffs
In a significant relief for India’s pharmaceutical industry, US President Donald Trump has exempted pharmaceuticals—one of India’s key exports to the US—from the new reciprocal tariff rule. The decision, announced on Thursday, spares Indian drugmakers from additional levies as part of Trump’s sweeping tariff measures aimed at countering trade imbalances.
A White House factsheet detailed the exemptions: "Some goods will not be subject to the Reciprocal Tariff. These include: (1) articles subject to 50 USC 1702(b); (2) steel/aluminum articles and autos/auto parts already subject to Section 232 tariffs; (3) copper, pharmaceuticals, semiconductors, and lumber articles; (4) all articles that may become subject to future Section 232 tariffs; (5) bullion; and (6) energy and other certain minerals that are not available in the United States."
The US market is crucial for India’s pharmaceutical industry, accounting for 30% of its overall exports. Industry leaders welcomed the exemption, saying it highlights the essential role of affordable generic medicines in public health, economic stability, and national security.
Farm exports may hold strong despite Trump tariffs
Despite the newly announced 26% tariff on Indian goods, India’s agricultural exports to the US are expected to remain stable, or even grow, as competing nations face steeper duties. Agricultural economist Ashok Gulati, quoted by PTI, said that India's agricultural exports would likely be less affected compared to those of its regional rivals.
Trump’s 26% tariff on Indian goods could have a limited impact on key agricultural exports such as seafood and rice, as the duties imposed on other nations in the region are significantly higher.
For seafood exports, particularly shrimp, Gulati stated that India's relative tariff advantage, along with shrimp's small share in overall US food expenditure, means that demand is unlikely to decline in a significant way. As a result, Indian seafood exporters may not see a major disruption in their trade with the US, and could even gain a competitive edge over other exporting nations.
Also Read: India's farm exports may withstand US tariffs as competitors face steeper duties, says economist
Trump tariffs: India’s electronics industry in a better position
India also seems to be in a better position than neighbouring China and Vietnam in the electronics export sector, as the newly imposed tariffs are far lower for India than for its competitors.
The India Cellular and Electronics Association (ICEA) stated that India has emerged in a favourable position in the first round of reciprocal tariff announcements. Compared to key electronics export competitors such as China, Vietnam, Thailand, and Indonesia, India secured better tariff treatment. ICEA attributed this outcome to "extraordinary and relentless efforts by our negotiators and leaders."
While some countries, such as Brazil and Egypt, secured marginally better tariff treatment, India’s positioning is particularly strong in comparison to China and Vietnam. China now faces combined tariffs of up to 54%-79%, while Vietnam has been hit with a 46% tariff. ICEA said that this provides India with a valuable near-term window of export competitiveness.
Also Read: India better placed on electronics than China, Vietnam after Trump move: Industry
India’s textiles sector poised to gain amid Trump tariff heat
Trump’s decision to impose a 26% reciprocal tariff on India may help boost the country’s apparel and textiles sector, as it makes India a more attractive sourcing destination for US buyers. Competing textile-exporting nations such as Vietnam, Bangladesh, Cambodia, Pakistan, and China have been hit with significantly higher tariffs, which could work in India’s favour.
The United States remains the largest buyer of Indian textiles. In 2023-24, India’s textile exports amounted to approximately USD 36 billion, of which the US accounted for nearly 28%—or USD 10 billion. The US share in India’s textile exports has been steadily rising, from 21% in 2016-17 and 2017-18 to 25% in 2019-20, reaching 29% in 2022-23.
Also Read: India's textile sector set to flourish amid US tariff changes
Trump tariff spares Indian steel, but dumping concerns loom
India’s domestic steel industry received a measure of relief as Trump exempted steel and aluminium articles from additional reciprocal tariffs. The US had imposed a 25% tariff on steel and aluminium exports last month, but the latest move ensures that these metals will not face further levies under the new tariff structure.
A factsheet released by the White House on Wednesday outlined the exemptions, stating that “some goods will not be subject to the Reciprocal Tariff. These include steel and aluminium articles and autos, auto parts already subject to Section 232 tariffs.”
While the exemption shields Indian steel and aluminium exports from additional costs, industry representatives cautioned that the global trade environment remains challenging. They pointed out that as access to the US and EU markets becomes more restricted for certain Asian steel-producing countries, there is a risk of increased dumping in India.
Industry leaders urged the Indian government to implement measures to prevent excess steel from flooding the domestic market, warning that without safeguards, Indian producers could face pricing pressures from lower-cost imports.
Also Read: India’s steel industry relieved as US exempts exports from additional tariffs
Meanwhile, Trump has also signed an executive order ending the de minimis trade exception, which previously allowed shipments worth $800 or less to enter the US duty-free. This decision could have a significant impact on e-commerce giants like Shein and Temu, both based in China, which had relied on the de minimis rule to expand their presence in the US market.
In another major trade move, Trump signed an executive order ending the "de minimis" trade exception, which had allowed imports valued at $800 or less to enter the US duty-free. The change is expected to impact Asian e-commerce giants, particularly China-based firms like Shein and Temu, which have relied on the exemption to sell directly to US consumers at lower costs.
With the new tariffs in place, India now faces both challenges and opportunities in its trade relationship with the US. While several export sectors will feel the heat from the 26% tariff, the exemptions for pharmaceuticals and the relative advantage in electronics and textiles offer some relief.
As global trade tensions rise, businesses and policymakers will be watching closely to see how India navigates this shifting landscape.
India has been hit with a 26% tariff on its exports to the US, placing it among the hardest-hit countries.
However, India will be able to navigate the tariff challenges smoothly, Bernstein said in a report. The report said India is more likely to negotiate with the US rather than escalate a trade dispute. While there may be some initial negative market reaction, it expects the economy to recover in the second half of the year.
PHD Chamber of Commerce and Industry said India's GDP will take only 0.1% hit in short-term from Trump tariff thanks to 'aatmanirbharta'.
Hemant Jain, President of PHDCCI, said India’s strong domestic manufacturing and ongoing government support through strategic policies such as production-linked incentive (PLI) schemes, Make in India, and Atmanirbhar Bharat will help maintain the country’s economic resilience.
India is not badly impacted by the tariffs, ASSOCHAM President Sanjay Nayar said, adding that the Indian economy is more inward-looking compared to other Asian markets.
Trump's decision to impose higher reciprocal tariffs on several Asian and European countries, including China, Vietnam, Taiwan, Thailand, and Bangladesh, could give India a chance to strengthen its position in global trade and manufacturing, said GTRI Founder Ajay Srivastava.
Srivastava said that Indian exports of steel, aluminium, and auto-related goods will face a 25% tariff, while pharmaceuticals, semiconductors, copper, and energy products will not be taxed.
Also Read: Trump's 26% tariffs put pressure on India. Is New Delhi ready for the impact?
Trump announces sweeping tariffs, markets on edge
Trump announced on Wednesday that the US would impose a universal 10% tariff on all imports, with additional higher levies on specific countries. The new duties target some of America’s biggest trading partners, with China now facing tariffs exceeding 50% on many goods, while the European Union, Japan, Vietnam, and others have also been hit with significant charges.
The move has deepened fears of retaliation from affected countries, with economists warning of potential disruptions in global trade flows. Investors are also jittery about the impact on US economic growth, as businesses and consumers brace for price increases.
Also Read: India to face 'discounted' 26% tariff from US
India hit with 26% tariff, higher than Japan and South Korea
Despite Trump’s strong personal ties with Prime Minister Narendra Modi, India was not spared from the tariff hikes. The new 26% levy on Indian imports is among the highest imposed on any major US trading partner.
India’s new tariff rate is slightly higher than the 20% imposed on the European Union, 24% on Japan, and 25% on South Korea. However, it remains well below the steep 54% rate imposed on China, which includes a newly announced 34% reciprocal tariff on top of an existing 20%. Vietnam, another key manufacturing hub, has been hit with a 46% tariff, while Thailand and Indonesia face 36% and 32% tariffs, respectively.
While some developed nations such as the UK (10%) and Switzerland (34%) have lower tariffs, they do not compete directly with India in key export categories. Among Asian economies, only Malaysia, which faces a 24% tariff, competes with India in some sectors.
Announcing the tariffs, Trump described Modi as a "great friend" but defended the measures as a necessary response to India’s trade policies. "You're a friend of mine, but you're not treating us right," he said. The US president called the new tariffs a "discounted reciprocal tariff" meant to counter India's high duties on American goods.
Also Read: Trump to Modi: ‘You’re not treating us right’ as US hits India with 26% tariff
Trup tariffs: Some industries may benefit
The tariffs mark a significant setback for India, which had sought to avert such measures by offering concessions on trade issues important to the Trump administration. Key export sectors, including textiles, engineering goods, electronics, and gems and jewellery, are expected to bear the brunt of the tariffs.
However, government officials and industry leaders have sought to downplay concerns, suggesting that India is still better placed than some of its competitors. "It is a mixed bag and not a setback for India," a senior official told the Press Trust of India.
Pharmaceuticals exempt from Trump tariffs
In a significant relief for India’s pharmaceutical industry, US President Donald Trump has exempted pharmaceuticals—one of India’s key exports to the US—from the new reciprocal tariff rule. The decision, announced on Thursday, spares Indian drugmakers from additional levies as part of Trump’s sweeping tariff measures aimed at countering trade imbalances.
A White House factsheet detailed the exemptions: "Some goods will not be subject to the Reciprocal Tariff. These include: (1) articles subject to 50 USC 1702(b); (2) steel/aluminum articles and autos/auto parts already subject to Section 232 tariffs; (3) copper, pharmaceuticals, semiconductors, and lumber articles; (4) all articles that may become subject to future Section 232 tariffs; (5) bullion; and (6) energy and other certain minerals that are not available in the United States."
The US market is crucial for India’s pharmaceutical industry, accounting for 30% of its overall exports. Industry leaders welcomed the exemption, saying it highlights the essential role of affordable generic medicines in public health, economic stability, and national security.
Farm exports may hold strong despite Trump tariffs
Despite the newly announced 26% tariff on Indian goods, India’s agricultural exports to the US are expected to remain stable, or even grow, as competing nations face steeper duties. Agricultural economist Ashok Gulati, quoted by PTI, said that India's agricultural exports would likely be less affected compared to those of its regional rivals.
Trump’s 26% tariff on Indian goods could have a limited impact on key agricultural exports such as seafood and rice, as the duties imposed on other nations in the region are significantly higher.
For seafood exports, particularly shrimp, Gulati stated that India's relative tariff advantage, along with shrimp's small share in overall US food expenditure, means that demand is unlikely to decline in a significant way. As a result, Indian seafood exporters may not see a major disruption in their trade with the US, and could even gain a competitive edge over other exporting nations.
Also Read: India's farm exports may withstand US tariffs as competitors face steeper duties, says economist
Trump tariffs: India’s electronics industry in a better position
India also seems to be in a better position than neighbouring China and Vietnam in the electronics export sector, as the newly imposed tariffs are far lower for India than for its competitors.
The India Cellular and Electronics Association (ICEA) stated that India has emerged in a favourable position in the first round of reciprocal tariff announcements. Compared to key electronics export competitors such as China, Vietnam, Thailand, and Indonesia, India secured better tariff treatment. ICEA attributed this outcome to "extraordinary and relentless efforts by our negotiators and leaders."
While some countries, such as Brazil and Egypt, secured marginally better tariff treatment, India’s positioning is particularly strong in comparison to China and Vietnam. China now faces combined tariffs of up to 54%-79%, while Vietnam has been hit with a 46% tariff. ICEA said that this provides India with a valuable near-term window of export competitiveness.
Also Read: India better placed on electronics than China, Vietnam after Trump move: Industry
India’s textiles sector poised to gain amid Trump tariff heat
Trump’s decision to impose a 26% reciprocal tariff on India may help boost the country’s apparel and textiles sector, as it makes India a more attractive sourcing destination for US buyers. Competing textile-exporting nations such as Vietnam, Bangladesh, Cambodia, Pakistan, and China have been hit with significantly higher tariffs, which could work in India’s favour.
The United States remains the largest buyer of Indian textiles. In 2023-24, India’s textile exports amounted to approximately USD 36 billion, of which the US accounted for nearly 28%—or USD 10 billion. The US share in India’s textile exports has been steadily rising, from 21% in 2016-17 and 2017-18 to 25% in 2019-20, reaching 29% in 2022-23.
Also Read: India's textile sector set to flourish amid US tariff changes
Trump tariff spares Indian steel, but dumping concerns loom
India’s domestic steel industry received a measure of relief as Trump exempted steel and aluminium articles from additional reciprocal tariffs. The US had imposed a 25% tariff on steel and aluminium exports last month, but the latest move ensures that these metals will not face further levies under the new tariff structure.
A factsheet released by the White House on Wednesday outlined the exemptions, stating that “some goods will not be subject to the Reciprocal Tariff. These include steel and aluminium articles and autos, auto parts already subject to Section 232 tariffs.”
While the exemption shields Indian steel and aluminium exports from additional costs, industry representatives cautioned that the global trade environment remains challenging. They pointed out that as access to the US and EU markets becomes more restricted for certain Asian steel-producing countries, there is a risk of increased dumping in India.
Industry leaders urged the Indian government to implement measures to prevent excess steel from flooding the domestic market, warning that without safeguards, Indian producers could face pricing pressures from lower-cost imports.
Also Read: India’s steel industry relieved as US exempts exports from additional tariffs
Meanwhile, Trump has also signed an executive order ending the de minimis trade exception, which previously allowed shipments worth $800 or less to enter the US duty-free. This decision could have a significant impact on e-commerce giants like Shein and Temu, both based in China, which had relied on the de minimis rule to expand their presence in the US market.
In another major trade move, Trump signed an executive order ending the "de minimis" trade exception, which had allowed imports valued at $800 or less to enter the US duty-free. The change is expected to impact Asian e-commerce giants, particularly China-based firms like Shein and Temu, which have relied on the exemption to sell directly to US consumers at lower costs.
With the new tariffs in place, India now faces both challenges and opportunities in its trade relationship with the US. While several export sectors will feel the heat from the 26% tariff, the exemptions for pharmaceuticals and the relative advantage in electronics and textiles offer some relief.
As global trade tensions rise, businesses and policymakers will be watching closely to see how India navigates this shifting landscape.
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