Imagine walking into your favourite store and suddenly seeing price tags shoot up overnight. That’s exactly what could happen with US President Donald Trump’s proposed tariff plan.
With new tariffs set to take effect on Liberation Day, the move is sending shockwaves across multiple industries. The noise around implementation is only expected to grow louder.
According to Emkay Global, India could potentially lose around $6 billion (0.16% of GDP) in exports if broad 10% tariffs are imposed. If tariffs rise to 25%, the hit could be $31 billion. The uncertainty around whether the US will impose broad country-level tariffs or sector-specific ones adds to the market jitters.
So, which sectors and stocks should investors watch out for? Let’s break it down.
1. Electronics: Will iPhone prices go up?
Electronics are India’s largest export category to the US, raking in $11.1 billion in FY24, or about 14% of total US exports from India. More than 50% of these exports are iPhones assembled in India and shipped to the US, added the Emkay report.
If the US imposes reciprocal tariffs, iPhones assembled in India could get pricier for American consumers. Given that Apple already faces 40% tariffs on Chinese-made iPhones, additional tariffs on India could disrupt Apple’s supply chain shifts and make India a less attractive manufacturing hub, the report noted.
Key stocks to watch:
Dixon Technologies (major electronics manufacturer)
Reliance Jio (5G equipment exports could face tariffs)
Bharat Electronics (defence electronics exports under lens)
2. Gems & Jewellery: A sparkling sector under the radar
As per the report, India’s jewellery exports to the US were worth $9.9 billion in FY24, accounting for 30% of total exports in this category. The US market is critical for cut and polished diamonds, gold jewellery, and lab-grown diamonds.
The brokerage added that India already imposes 20% tariffs on gold jewellery imports, whereas the US imposes only 5.5-7%. If the US matches India’s high import duties, Indian jewellery exports could take a significant hit.
Key stocks to watch:
- Titan (Tanishq could see weaker export demand)
- Rajesh Exports (large gold jewellery exporter)
- Vaibhav Global (US market dependency)
3. Textiles & Apparel: Will India Benefit from China Tariffs?
The US is a major buyer of Indian textiles, accounting for 28% of total textile exports in FY24 (approx. $9.6 billion). However, in the apparel segment, India lags behind China (21%), Vietnam (19%), and Bangladesh (9%) in the US import market, noted the report.
If the US raises tariffs on Indian textiles, it could be a setback. However, if tariffs on Chinese apparel remain high, India could gain from diverted US orders.
Key stocks to watch:
- Page Industries (Jockey’s India partner, major apparel exporter)
- Welspun India (large home textiles exporter to the US)
- Trident (bed and bath linen exports to US)
4. Automobiles: Will high tariffs hurt India?
India’s automobile exports to the US totaled $2.6 billion in FY24, but only $0.2 billion was from passenger vehicles and motorcycles. Most exports are auto components, which totaled $2.1 billion, said the report.
While the auto sector could face steep reciprocal tariffs of up to 70%, India barely exports cars and bikes to the US, making the impact limited. However, auto component makers are more exposed.
Key stocks to watch:
- Bharat Forge (44% revenue from US exports)
- Tata Motors (Jaguar-Land Rover sales in US could be affected)
- Motherson Sumi (auto component exporter at risk)
5. Pharma: Will India’s Role as US’ Medicine Hub Save It?
As per the brokerage report, the US is India’s biggest market for pharmaceuticals, with $12.5 billion in exports in CY24. India supplies 47% of the US’ generic drug imports.
Unlike other sectors, the US relies heavily on Indian pharmaceuticals. Imposing tariffs on Indian generics could increase drug prices in the US and disrupt medical supply chains. This makes it unlikely that pharma will face major tariffs.
Key stocks to watch:
- Dr. Reddy’s (48% revenue from the US)
- Sun Pharma (large US market presence)
- Lupin (sensitive to US FDA regulations and tariffs)
6. IT Sector: The silent casualty?
The US is the biggest client base for India’s IT services industry, with firms like TCS, Infosys, and Wipro deriving over 50% of revenue from American clients.
While IT services are not directly affected by tariffs, restrictive US policies could tighten outsourcing contracts and limit H-1B visa approvals, hitting companies that rely on on-site US projects.
Key stocks to watch:
- Mphasis (79% revenue from US)
- Infosys, TCS, Wipro (outsourcing concerns may affect stock prices)
While the US-India trade relationship faces uncertainty, not all sectors are equally vulnerable. According to Emkay Global, the overall impact could be less severe than feared, with auto, pharma, and electronics better positioned to weather the storm. Meanwhile, gems, jewellery, and apparel may require focused negotiations to avoid major losses.