How Will Trump's 25% Tariff Affect Indian Exports? Find Out Now

In an interesting turn of events, the US President, Donald Trump, has imposed a 25% tariff on Indian exports, along with an additional penalty fee, effective from 1st August, 2025.

Yes, “The foe has turned into an enemy”, while publically calling out India using a social media platform, quoting, "India has the most strenuous and obnoxious non-monetary trade barriers than any other country”, said Trump.

It seems that the efforts of our honourable Prime Minister, Shri Narendra Modi, have failed, even after being the first one to initiate trade discussions on his visit to the White House in February.

Seeing this, experts are saying that, "Internal Indian calculations sees now that tariffs exceed 25% approx., 10% of total Indian exports would be affected from July to September 2025."

This calls for a big shout out to when the “bilateral trade between India and the US reached $129.2 billion in 2024.”

On that note, it seems that a lot of business is at risk. Let's see, “Which sectors are at maximum risk because if the Trump's 25% tariff on Indian exports?”

Which Sectors will the Trump 25% Tariff Affect the Most?

Let us take a closer look at the industries that will feel the biggest impact from the 25% tariff:

1. Electronics
   

   India has become a major supplier of smartphones, recorded 44% supply to the U.S. in 2025, especially for companies like Apple. But now, with the new tariff in place, Apple will have to rethink its strategy of making iPhones in India. If these smartphones face a 25% tariff, it could raise costs and slow down the growth of India’s electronics sector.

2. Gems & Jewellery
   India is one of the biggest exporters of gems and jewellery to the US, valued at over $10 billion. But with the new tariff, the Gem and Jewellery Export Promotion Council is worried that costs will rise, shipments will be delayed, and jobs could be lost. This could harm India’s position in the global market.

3. Refining Industry
   

   India’s refineries rely heavily on Russian crude oil, which is cheaper than oil from other sources. With the new tariff & potential penalties for trading with Russia, the price of crude oil could go up, which would hurt India’s refining companies like Reliance Industries and Indian Oil.

4. Pharmaceuticals
   

   As per the Forbes report, India supplies 40% of the generic drugs used in the United States, saving American consumers billions of dollars. However, 25% tariff will make these Indian medicines more expensive. This would not only hurt US consumers but also put pressure on Indian pharmaceutical companies like Sun Pharma & Dr. Reddy’s, which rely heavily on the US market.

5. Textiles and Apparel
   

   India is a key supplier of textiles, clothing and footwear to major U.S. retailers like Walmart and Gap. The new tariff could make Indian products less competitive compared to countries like Vietnam, which have lower tariffs. This could hurt India’s textile industry, affecting both large manufacturers and small exporters.

Also read: How will U.S. Tariffs Impact Nifty Pharma's Growth in 2025?

What Does This Mean for India?

This tariff is a big deal for India. If it stays in place, it could shrink profit margins for companies, disrupt supply chains and affect jobs in several key sectors. In short, India’s economy could take a hit, especially in industries that rely heavily on exports to the US.

India’s trade negotiations with the US have also stalled, making it harder to find a quick resolution.

For now, the business industry has to address its main question, "How to cope up with this new 25% tariff?"

Well, in the eyes of experts, the best way to deal with this whole new situation is to re-adjust current strategies and find new markets along with ways to reduce manufacturing costs.

How Can Indian Expose Respond?

The good news is that there are steps India can take to mitigate the damage. Indian exporters might have to look for new markets to sell their goods. They can also try to improve their efficiency to cut costs and stay competitive. Additionally, Indian policymakers may need to push for better trade deals to protect key industries from the full impact of the tariffs.

In the coming months, you will see how India adapts to these changes. It’s clear that the situation is challenging, but with quick action, India can still minimize the damage.