Trump Slaps 25% Tariffs on India: Which Sectors Will Take the Biggest Hit?
US President Donald Trump’s announcement to impose a 25% tariff on Indian exports starting August 1 has sent shockwaves through Indian industry, with multiple sectors bracing for impact. The Trump administration has also warned of additional penalties over India’s continued energy purchases from Russia.
For context, Vietnam currently faces a 20% tariff, while Indonesia and Japan face 19% and 15% respectively.
In response, New Delhi underscored that India and the US have been engaged in negotiations to finalize a fair, balanced, and mutually beneficial bilateral trade agreement. “The government will take steps necessary to secure our national interest,” the Ministry of Commerce and Industry said in a statement.
Calling India’s trade practices “the most strenuous and obnoxious non-monetary trade barriers,” Trump claimed on Truth Social that India imposes “some of the highest tariffs in the world.”
The timing of the announcement is a blow to New Delhi, which has been actively working toward securing a trade agreement with Washington. According to reports, up to 10% of India’s total exports could be affected in the July–September quarter if the proposed tariffs take effect. In 2024, bilateral trade between India and the US stood at $129.2 billion.
Key Indian sectors including electronics, pharmaceuticals, gems and jewellery, textiles, and energy are likely to bear the brunt of the new tariffs. However, the scale of the impact will also depend on the tariffs imposed on competing nations.
Electronics
India had recently emerged as a strategic alternative for US tech companies amid the ongoing US–China trade tensions. Apple Inc., for instance, had ramped up its plans to assemble more iPhones in India.
But the new tariffs could jeopardize these efforts.
“Apple’s US iPhone sourcing strategy from India to circumvent China tariffs could be meaningfully set back if tariffs in India extend to 25%,” wrote Bloomberg Intelligence analysts Anurag Rana and Andrew Girard on July 30. “A 25% surcharge would most likely force Apple to revise this plan.”
Pharmaceuticals
India is the largest supplier of generic (non-patented) drugs to the US, with exports worth around $8 billion annually. Major players such as Sun Pharmaceuticals, Dr. Reddy’s Laboratories, and Cipla generate at least 30% of their revenue from the US market.
Notably, four in every ten prescriptions in the US in 2022 were filled by Indian pharmaceutical companies. Indian drugs contributed to $220 billion in savings for the US healthcare system that year alone, and $1.3 trillion in savings over the decade ending in 2022.
Gems and Jewellery
The Gem and Jewellery Export Promotion Council called the proposed tariffs “deeply concerning,” warning they could disrupt critical supply chains and threaten thousands of livelihoods.
The US is the largest market for Indian gems and jewellery, accounting for more than $10 billion in exports. “A blanket tariff could inflate costs, delay shipments, distort pricing, and strain every segment of the value chain,” the Council said in a statement on July 30.
Textiles and Apparels
Indian home furnishing, apparel, and footwear exporters are integral to the supply chains of major US retailers like The Gap Inc., Walmart Inc., Costco Wholesale Corp., and Pepe Jeans.
India has long sought tariff concessions to stay competitive with countries like Vietnam. The Confederation of Indian Textile Industry described the new tariffs as a “stiff challenge,” warning that they would “seriously test the resolve and resilience” of the sector.
Energy and Refining
Trump’s warning of additional penalties over India’s continued oil imports from Russia has raised alarm among both public and private refiners. State-run companies such as Indian Oil Corp, Bharat Petroleum, and Hindustan Petroleum, along with private giant Reliance Industries, could face major cost pressures.
Currently, 37% of India’s oil imports come from Russia—bought at discounted rates, helping Indian refiners maintain strong margins. Any disruption to this supply could spike import costs and erode profits.
The threat of penalties also comes shortly after Reliance Industries signed a deal to buy up to 500,000 barrels per day from Russia this year, making it India’s largest buyer of Russian crude.
