Increased American levies are predicted to cause a $5.76 billion drop in India’s merchandise exports to the US this year from industries like electronics, gold, marine products, and electricity. A portion of the losses can be mitigated by India’s competitive position in a few product categories. Textiles, clothing, ceramics, inorganic chemicals, and pharmaceuticals are among the industries that may see slight increases.
With the exception of pharmaceuticals, semiconductors, and other energy products, the US has declared an additional 26% tariff on Indian imports starting on April 9. Baseline tariffs of 10% are in effect from April 5–8.
India shipped $89.81 billion worth of goods to the United States in 2024. It stated that decreases are anticipated in a number of important product categories. Fish and crustacean exports could drop by 20.2%, iron or steel products by 18%, gems and gold products by 15.3%, automobile and parts exports by 12.1%, and electrical, telecom, and electronic items by 12%.
The remaining basket of items is most affected. These exports accounted for 74.8% of overall trade, or USD 67.2 billion. A 26% tariff will now be applied on them. Even if MFN duties are still in effect, this massive increase is anticipated to change the nature of trade in many different industries. In 2024, India’s electronics and smartphone exports to the US totaled USD 14.4 billion, or a substantial 35.8% of its total shipments in this category worldwide.
It added that India is currently the fourth-largest supplier of electronics and smartphones to the US, behind China, Mexico, and Vietnam, with a 6.68 percent share, and that the imposition of a high duty on Indian goods raises questions about how competitive its exports are in the US market.
According to our estimates, the tariff increase on smartphones and gadgets might result in a 12% decrease in India’s exports to the US, or about USD 1.78 billion. In 2025, India’s exports of mechanical appliances and machinery are projected to drop by 2%, or USD 142.1 million.
Nearly a third of India’s global exports in this category were Indian frozen fish and shrimp, which were valued at USD 2 billion when they were purchased by the US last year. In 2024, India sent USD 2.8 billion worth of automobiles and auto parts to the US, which accounted for 12.7% of India’s total exports to the US. Currently, this is subject to a 1% import tariff.
Other elements that might not apply in actual trade situations include exchange rates, supply chain dynamics, global demand, non-tariff obstacles, and even US tariffs.