In response to an evaluation of the White Home's govt order by the International Commerce Analysis Initiative (GTRI), the 25 per cent tariff will now be relevant to sectors like prescribed drugs and electronics, which had been earlier exempted from import duties by the US.
India will face tariffs of 25 per cent on its exports to the US as President Donald Trump issued an govt order itemizing the varied duties that Washington will impose on exports from international locations all over the world.
Within the govt order titled ‘Additional Modifying The Reciprocal Tariff Charges', Trump introduced tariff charges for almost 70 nations.
“This blanket tariff, authorised by President Trump, is among the hardest commerce actions the US has taken towards a key buying and selling associate in recent times,” GTRI Founder Ajay Srivastava stated, including “What units this motion aside is that, in contrast to many different buying and selling companions, India has been denied all product-level exemptions, even for merchandise and sectors, the US exempted items from different international locations”.
These tariff exempted classes included completed pharmaceutical medication, energetic pharmaceutical substances (APIs), and different key drug inputs; power merchandise reminiscent of crude oil, refined fuels, pure fuel, coal, and electrical energy; essential minerals; and a variety of electronics and semiconductors, together with computer systems, tablets, smartphones, solid-state drives, flat panel shows, and built-in circuits.These exclusions don't apply to India. As a substitute, India is topic to a flat 25 per cent advert valorem responsibility throughout all items, with no exceptions by product or sector, he stated.The order mentions that tariffs could also be lowered as soon as international locations make a cope with the US.
Srivastava stated that this order is greater than only a tariff measure and a strain tactic.
“International locations like China have retained exemptions on essential items like prescribed drugs, semiconductors, and power. However India has been singled out for harsher therapy, with no product-level exemptions by any means. The message is obvious – conform to US geopolitical views, signal a deal or endure blanket tariffs – and India is being made the instance for others, ” he stated.
Whereas Indian items can pay tariffs on the charge of 25 per cent from August 7, items in transit can proceed paying tariffs at earlier charges of 10 per cent on most merchandise (apart from metal and aluminium, the place tariffs are 50 per cent and tariff-exempt merchandise like smartphones) as much as October 5, 2025, the suppose tank stated.
“Tariff exemption to different international locations and never India will doubly hit India's exports of petroleum merchandise (USD 4.1 billion in FY2025), smartphones (USD 10.9 billion), and Prescription drugs (USD 9.8 billion)to the US. All different sectors, engineering items, electronics, and textiles may also bear the brunt of the tariffs,” he stated.
Additional, he stated as per fast estimates, India's items exports in FY 2026 might come down by 30 per cent from USD 86.5 billion in FY 2025 to USD 60.6 billion in FY 2026.
Most affected classes will probably be petroleum merchandise, prescribed drugs and electronics, and every of those has excessive import content material and low home worth add, he stated.
The US has imposed new tariffs on imports from numerous international locations, with charges starting from 10 per cent to 41 per cent. These will probably be over and above the usual most favoured nation tariffs.
Which means that imports from these international locations will now face each the usual US tariff and a further reciprocal tariff, elevating general duties considerably, the GTRI stated, including international locations dealing with greater tariffs (25-30 per cent) embody India, Brunei, Kazakhstan, Moldova, and Tunisia.
India's export competitors– Bangladesh, Sri Lanka, Taiwan, and Vietnam — face a 20 per cent responsibility.
