The impact of reciprocal tariff on India’s exports to the US in 2025 will be mild and only select products will be at a disadvantage in the emerging situation, according to report by trade policy think tank Global Trade Research Initiative (GTRI)
According to SU data India exported goods and services worth $ 86.81 billion to the US in 2024 and in the current year (2025), it will drop $ 5.79 billion or 6.41 % as a result of the new trade measures, the report said.
Exports of fish and crustaceans may fall by 20.2%, iron or steel articles by 18.0%, and diamonds, gold, and related products by 15.3%. Vehicle and parts exports are projected to drop by 12.1%, while electrical, telecom, and electronic products may decline by 12.0%.
Other categories such as plastics and articles are expected to see a decline of 9.4%, carpets 6.3%, petroleum products -5.2%, organic chemicals -2.2%, and machinery -2.0%.
Despite the pain points and disruption, the report has also identified pockets of opportunities. “India could see modest export gains in sectors where the US has raised tariffs on competing countries. These include textiles made up (4.2%), apparel (3.2%), ceramic products (3.1%), albuminoidal substances, glues, and enzymes (3%), inorganic chemicals (3%), and pharmaceuticals (2.1%).”
Energy products, including petroleum, solar panels, and pharmaceuticals as well as copper, have been exempted from country-specific tariffs. These high-value items accounted for $ 20.4 billion or 22.7% of India’s exports to the US in 2024. They will continue to face only the standard MFN (Most Favoured Nation) tariff.
Key industrial goods such as steel, aluminum, automobiles, and auto parts will face a 25 % tariff. These represent $ 2.2 billion, or 2.5 per cent of India’s total exports to America, with no change to their MFN status.
“However, the largest impact falls on the remaining basket of goods. These exports valued at $ 67.2 billion or 74.8 % of total trade. They will now be hit with a 26 % tariff. While MFN tariffs still apply, this sweeping hike is expected to reshape trade dynamics across a wide range of industries,” GTRI Founder Ajay Srivastava said.
India’s exports of electronics and smartphones to the US reached $ 14.4 billion in 2024 or 35.8 % of total exports. While the average import duty on these products is just 0.4 %, Indian goods are now set to face a steep duty. “This could reduce India’s exports to the US by 12 %,” he said. It added that India’s seafood exports may be hit hard by the new tariffs.The US imported $ 2 billion worth of Indian frozen fish and shrimp last year, making up nearly a third of India’s global exports in this category. “Exports are expected to fall by 20.2 %as Canadian products remain tariff-free under the trade pact with US,” it said.
On gold jewellery and cut and polished diamonds, the analysis stated that given India’s relatively low value addition in this sector and the heavy new tariffs, exports are projected to fall by 15.3 %. India exported $ 11.9 billion worth of gold jewellery and cut and polished diamonds to the US in 2024. The sector at present has 2.1 per cent duty.