Despite US President Donald Trump announcing 50 per cent tariffs on Indian exports, the move is expected to affect only 4.8% of India’s global export basket, which hit a record $820 billion in 2024–25, according to official estimates.
A senior government official clarified that the new tariffs apply only to $40 billion worth of exports destined for the US.
Crucially, over $30 billion of India’s exports — including pharmaceuticals, smartphones, semiconductors, and energy — remain under an exemption list, shielding them from the higher duties for now.
India exported $10.5 billion worth of pharmaceuticals and $14.6 billion in electronics (mostly smartphones) to the US in FY25. These sectors, along with $4.09 billion in petroleum exports, continue to enjoy exemptions from Trump’s duties.
Thanks to these exemptions, India exports to US surged in the first half of 2025.
From January to June, the US share of India’s merchandise exports rose from 17-18% to over 20%, reflecting front-loaded shipments by exporters ahead of the August tariff implementation.
India’s total exports showed mixed trends — growing less than 2% in Q1 FY26 but shrinking over 4% in Q4 FY25. Despite that, exports to the US accounted for 23% of India’s total shipments in Q1 FY26.
Exports to the US reached $25.52 billion during the quarter, a nearly 23% jump from the previous year, while bilateral trade crossed $86 billion in FY25.
However, concerns remain, with Trump threatening tariffs up to 200% on foreign-made drugs and potential removal of the smartphone exemption, which could deeply impact India’s outbound shipments in the future.
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