US tariff without exemptions hits $25 billion Indian exports

The United States’ decision to impose a flat 25 per cent tariff on all Indian-origin goods from August 7, without offering any product-level exemptions, could severely hit India’s exports to the country, according to the Global Trade Research Initiative (GTRI).Based on an analysis of the White House’s executive order titled ‘Further Modifying the Reciprocal Tariff Rates’, GTRI said the sweeping tariff will now cover sectors that previously enjoyed exemptions — such as pharmaceuticals, electronics, and energy products — making the move one of the toughest trade measures the U.S. has taken against India in recent years.
GTRI founder Ajay Srivastava said that the U.S. has granted product-level exemptions to many trading partners, including China, but India has been denied similar concessions. “What sets this action apart is that India has been denied all exemptions, even for products like finished pharmaceutical drugs, active pharmaceutical ingredients (APIs), energy items, and a range of electronic and semiconductor products,” he said.According to the think tank, this blanket duty will raise export costs significantly for India, which exported petroleum products worth $4.1 billion, smartphones worth $10.9 billion, and pharmaceuticals worth $9.8 billion to the U.S. in FY25. These sectors are now at risk of losing their competitiveness in the American market.
Srivastava added that while the executive order allows for tariff rates to be reduced if countries sign trade agreements with the U.S., India is being made an example to pressure others to align with U.S. geopolitical interests. “The message is clear — agree to U.S. terms or face blanket tariffs,” he remarked.
According to information,the new duty structure also states that Indian goods already in transit before August 7 may continue to face the earlier tariff rates (10 per cent for most items and 50 per cent for steel and aluminium) up to October 5, 2025.Quick estimates suggest India’s overall goods exports to the U.S. could fall 30 per cent — from $86.5 billion in FY25 to $60.6 billion in FY26. Petroleum, pharmaceuticals, and electronics — all of which have high import content and low domestic value addition — are expected to bear the brunt of the impact.
Other sectors like engineering goods, textiles, and machinery will also be affected by the flat duty. Meanwhile, India’s competitors including Bangladesh, Sri Lanka, Taiwan, and Vietnam will face lower tariffs of around 20 per cent, further tilting the trade balance against Indian exporters.The new U.S. tariffs, ranging from 10 per cent to 41 per cent for various countries, are over and above the standard most-favoured-nation (MFN) tariffs, significantly increasing the effective import duties faced by Indian goods in the U.S. market.

(Business Correspondent)