- Donald Trump announced 25% tariffs on imports from India effective Friday
- US is India’s largest market for pharmaceuticals, accounting for 40% of exports
- India exported $2.2bn in auto parts to the US in FY24, 29.1% of total auto exports
United States President Donald Trump announced 25 percent tariffs on imports from India and an unspecified "penalty" for New Delhi's purchases of Russian weapons and energy, measures which will likely impact some key sectors in India.
The measures, which will kick in on Friday, are likely to impact the following sectors:
Textile exports
US makes up 28 per cent of India's textile exports, with companies like Welspun Living and Trident, being key players. The latest tariffs will especially have an impact on cotton and garments.
Pharmaceuticals
The US is India's largest overseas pharma market, with exports rising 21 per cent from $8.1 billion in FY24 to $9.8 billion in FY25. The latest figures mean 40 per cent of India's total pharma exports go to the US, remaining a key supplier of affordable medicines to the country.
Importers in the US may cite Intellectual Property and pricing issues, hitting pharma exports from India.
Automobile Components
India exported $2.2 billion worth of auto parts to the US in FY24, accounting for 29.1 per cent of its total auto parts exports. An increase in tariffs would likely translate into higher costs for the supply chains, impacting business.
On the other hand, India's passenger car exports to the US may not be hit too hard as they stood at $8.9 million in 2024, compared to the country's total global car exports of $6.98 billion. This means that only 0.13 per cent of India's total car exports are directed to the US.
Steel & Aluminum
India exported approximately $6.2 billion worth of steel and finished steel products to the US in FY25, including a wide range of engineered and fabricated steel components and about $0.86 billion of aluminium and its products. Indian steel manufacturers have been gradually increasing market share in the US through high-quality production and competitive pricing.
Security and dumping claims are likely to arise as tariffs come into effect.
Solar Equipment
Most Indian PV exports are to the US, which accounted for 97 per cent and 99 per cent of India's PV exports in FY23 and FY24 respectively, according to Institute for Energy Economics and Financial Analysis.
Information Technology Services
The US is the biggest importer of software-related services from India at 54 per cent, according to Reserve Bank of India data for fiscal 2024 cited by a Jefferies report.
