US President Donald Trump’s decision to enforce a 25% tariff on Indian goods is tending to affect India’s global exports. The industries most affected include pharmaceuticals, textiles, oil and gas, auto components, and electronic equipment.
The United States is India’s largest export destination, according to data from India’s Ministry of Commerce. It accounts for more than $78 billion in exports in the financial year 2024. Two industrial sectors, Pharmaceuticals and textiles, alone make up around 30% of this figure.
Industry experts admit that a tariff of this scale could increase prices for US buyers significantly. However, it will likely drop India’s export volumes in the short term for sure. Other major exports to the US market, electronic goods, auto parts, and refined petroleum products, may also see a further decline due to higher landed costs.
Pharmaceutical Exports May Face Regulatory and Cost Challenges
Pharmaceutical production in India is ranked high on the global stage; India is the third-largest producer in terms of volume. More than 40% of generic drugs produced by India are sold to the US.
This new tariff policy may increase procurement costs for healthcare providers in America. This new tariff will further delay supply chains. There are chances of adding regulatory complexities, including new documentation and additional requirements for shipping firms to export their goods to the US.
Energy and Textile Sectors Under Pressure Amid Global Competition
India’s refined oil exports and textile goods could face greater pressure in global markets. This includes garments and home furnishings-related items. Also, annual textile imports from India to the US total around $8 billion, according to data from the Office of Textiles and Apparel (OTEXA).
(Data Source: US Energy Information Administration)
This rise in tariffs imposed by the US may shift sourcing to other low-cost nations like Vietnam, Bangladesh, or Mexico. For the energy sector, which depends heavily on US demand for refined fuels, the tariffs may reduce margins, increase costs, fluctuate demand, and trigger a re-evaluation of trade partners and routes.
Ankur Mishra is a journalist who covers an extensive range of news, from business, stock markets, IPOs to geopolitics, world affairs, international crises, and general news. With over a decade of experience in the business domain, Ankur has been associated with some of the reputed media brands. Through a sharp eye on global marketplaces along with deep insights and analysis of business strategies, Ankur brings simplicity to the complex economic matrix to decode market trends and empower people.
He is committed to entrenched data, facts, research, solutions, and a dedication to value-based journalism. He has covered trade tariff wars, international alliances, corporate policies, government initiatives, regulatory developments, along with micro- and macroeconomic shifts impacting global fiscal dynamics.
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