Trump's tariffs on India explained: Who's bearing the brunt and how bad it can get

From calling India the "Tariff King" to levying steep import duties, US President Donald Trump has steadily toughened his trade policy towards New Delhi. These moves are being widely seen as pressure tactics to push India into accepting the terms proposed by the US in the Bilateral Trade Agreement (BTA).

Ajay Srivastava, founder of GTRI, said the steep US tariffs could make Indian goods far costlier, potentially slashing exports to the US by 40–50%.

Here’s a breakdown of the key developments and their impact on Indian exporters:

Timeline of Trump's tariff actions against India

• October 2019: Trump labels India the “tariff king.”
• September 2024: He refers to India as a “tariff abuser.”
• April 2, 2025: US formally announces a 26% import tariff on Indian goods, effective April 9.
• April 5, 2025: A White House executive order imposes a 10% baseline tariff on all imports, with a country-specific tariff of 16% for India, set to start April 9.
• Exemptions: Sectors like pharmaceuticals, electronics, and energy products are kept out.
• April 9, 2025: Implementation of India-specific tariffs (16%) paused for 90 days, now deferred to July 9. The 10% baseline tariff stays.
• July 8, 2025: Suspension extended again, now till August 1.
• July 30, 2025: US announces a 25% tariff plus a penalty on Indian goods for purchasing oil and military hardware from Russia.
• July 31, 2025: White House issues an executive order to enforce the 25% tariff from August 7. No mention of penalty; the 10% baseline duty and exemptions remain.
• August 5, 2025: Trump declares he will raise tariffs on India “very substantially.”
• August 6, 2025: An additional 25% penalty is imposed, bringing the total tariff to 50% on Indian goods due to continued Russian oil imports.

Current import duty structure on Indian goods

Starting August 7, Indian goods entering the US face:

• 25% tariff (inclusive of the 10% baseline),
• Plus MFN (Most Favoured Nation) rates, and
• Plus trade remedy measures, wherever applicable.

Example – Shrimp exports:

• MFN rate: 0%
• Anti-dumping duty: 2.49%
• Countervailing duty: 5.77%
• Total tariff from August 7: 33.26%
• From August 27 (after 50% duty): 58.26%

Additional sector-specific tariffs

The US has also imposed extra duties on select product categories:

• Steel and Aluminium: 50%
• Copper: 50%
• Auto parts: 25%
• These are additional and apply over and above existing tariffs.

Sectors exempted from tariffs

According to think tank GTRI, the following categories are exempt from the 50% tariffs:

• Pharmaceuticals: Finished drugs, APIs, and key drug inputs.
• Energy products: Crude oil, natural gas, refined fuels, coal, electricity.
• Critical minerals
• Electronics: Computers, smartphones, tablets, flat-panel displays, integrated circuits, SSDs, semiconductors.

In FY 2024-25, India-US bilateral trade stood at USD 131.8 billion:

• Exports: USD 86.5 billion
• Imports: USD 45.3 billion

Sectors that will be hit the hardest

Key export sectors likely to face major impact:

• Textiles and clothing
• Gems and jewellery
• Shrimp
• Leather and footwear
• Chemicals
• Electrical and mechanical machinery

Export value of affected sectors in FY25

• Shrimp: USD 2 billion
• Organic chemicals: USD 2.7 billion
• Carpets: USD 1.2 billion
• Apparel (knitted): USD 2.7 billion
• Apparel (woven): USD 2.7 billion
• Textiles and made-ups: USD 3 billion
• Diamonds, gold, jewellery: USD 10 billion
• Machinery/mechanical appliances: USD 7.7 billion
• Furniture/mattresses: USD 1.1 billion
• Vehicles and parts: USD 2.6 billion

What exporters are saying

Yogesh Gupta, seafood exporter;
“Now India’s shrimp will become expensive in the US market.”

Confederation of Indian Textile Industry (CITI):
Called it a “huge setback” and said they are “deeply concerned.”

Colin Shah, MD, Kama Jewellery:
“The move is a severe setback.”

Ajay Srivastava, Founder, GTRI:
The new tariffs could make Indian goods significantly more expensive and may cut US-bound exports by 40-50%.

Federation of Indian Export Organisations (FIEO):
Called the tariff move “extremely shocking” and warned it could impact 55% of India’s exports to the US.

(Note: All quotes are from news agency PTI)

Tariff comparison: India vs global competitors

India now faces the highest US tariff at 50%, on par with Brazil. Other major competitors face significantly lower duties:

• Myanmar: 40%
• Thailand, Cambodia: 36%
• Bangladesh: 35%
• Indonesia: 32%
• China, Sri Lanka: 30%
• Malaysia: 25%
• Philippines, Vietnam: 20%

India’s exporters fear this puts them at a severe disadvantage in the US market.

With inputs from PTI