India’s $87 Billion Exports at Risk Amid US Tariff Move: Key Sectors Likely to be Hit
New Delhi, July 31, 2025: The United States has announced a steep 25% tariff on several Indian exports, a move set to take effect from August 1, 2025. The decision, backed by US President Donald Trump, has cast a shadow over the India-US trade relationship and sparked serious concerns across Indian export sectors. While the Indian government has assured strict measures to safeguard the interests of farmers, MSMEs, and industries, the $87 billion trade channel now stands under threat.
Major Export Segments in Trouble
India, one of the largest trading partners of the US, could face significant disruption across its export ecosystem. The new tariffs will directly impact key sectors, including:
Automobiles & Auto Components
Companies like Tata Motors and Bharat Forge are expected to witness declining demand, especially for high-end vehicles. This downturn may further affect employment in the automotive sector.
Electronics & Solar Energy
Smartphone makers and solar panel manufacturers could see squeezed profit margins, making exports unviable under the increased duty structure.
Jewelry & Marine Products
With over $9 billion in annual exports, these sectors face immediate cost pressures. Exporters may either absorb the tariff hit, transfer the burden to buyers, or explore new markets.
Textiles & Garments
While low-cost apparel may still stay competitive due to higher tariffs on Chinese and Vietnamese rivals, India could lose market share in high-margin fashion and specialty garments.
Exempted Sectors
Pharmaceuticals, semiconductors, and essential minerals have been exempted from the new tariff list, providing a slight breather to a few major Indian exporters.
Economic & Strategic Impact
Experts warn that these tariffs could have long-term consequences, potentially pushing India into a worse position compared to Vietnam and China. Economists also estimate that if the tariff regime persists through FY 2025–26, India’s GDP could contract by 0.2% to 0.5%.
The Indian government is reportedly exploring all diplomatic and strategic options to resolve the trade friction and protect domestic interests.
