How Much of India's Nearly $30 Billion Exports Are Safe from Trump's Tariff?
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Synopsis
In light of President Trump's recent tariff announcement, India has secured over $30 billion in exports, particularly in pharmaceuticals and electronics. This article explores the implications of these exemptions and the potential risks ahead.
Key Takeaways
- Over $30 billion in Indian exports are currently secure from tariffs.
- Pharmaceuticals and electronics are key sectors benefiting from exemptions.
- India's exports to the US rose to 23 percent of its total shipments in recent quarters.
- Future tariffs may still pose risks to these sectors.
- Exports to the US increased significantly in Q1 FY26.
New Delhi, Aug 6 (NationPress) - In a recent announcement, US President Donald Trump declared a 50 percent tariff on imports from India. However, shipments exceeding $30 billion, which include pharmaceuticals and specific electronic products like smartphones, semiconductors, and energy, remain protected from increased duties as they fall under an exemption list.
During FY25, India exported pharmaceuticals and electronic goods, primarily smartphones, valued at $10.5 billion and $14.6 billion, respectively, making up 29 percent of its total exports to the US.
Additionally, petroleum exports, amounting to $4.09 billion for FY25, are also safe from the new tariffs due to their inclusion on the exemption list. Overall, India's exports to the US reached $86.51 billion in FY25.
Notably, these crucial sectors have not yet been impacted by Trump's new tariffs, which are expected to take effect within the next 21 days.
Since January, India's exports to the US have surged due to this exemption, as there are currently no tariffs on these goods. From January to June 2025, the US share of India's merchandise exports rose from 17-18 percent to over 20 percent.
This increase is attributed to exporters ramping up shipments ahead of the tariff increase in August, along with the exemptions for smartphones and pharmaceuticals, which were previously exempt from the 10 percent baseline duty initiated in April, according to industry analysts.
Despite a less than 2 percent growth in total exports during Q1 FY26 and a more than 4 percent contraction in Q4 FY25, data from the Commerce Ministry indicates that exports to the US comprised approximately 23 percent of India's total shipments during the June quarter of FY26 and the first quarter of FY25.
However, risks remain as Trump has warned of potential tariffs reaching up to 200 percent on imported pharmaceuticals, and future decisions could lead to the removal of smartphone exemptions.
In Q1 FY26, India's exports to the US amounted to $25.52 billion, reflecting a nearly 23 percent increase compared to the previous year. The total trade for the quarter was $32.41 billion, with annual figures for FY25 surpassing $86 billion, according to the commerce ministry.
Point of View
It is crucial to understand the ongoing dynamics of international trade policy. Trump's latest tariffs could reshape the landscape for Indian exports, but the current exemptions provide a temporary reprieve for key industries. The focus must remain on long-term strategies that ensure stability and growth in these sectors.
NationPress
06/10/2025
Frequently Asked Questions
What are the key sectors affected by Trump's tariffs?
The key sectors affected include pharmaceuticals, smartphones, semiconductors, and energy. However, these sectors are currently exempt from the new tariffs.
How much did India export to the US in FY25?
India's total exports to the US amounted to $86.51 billion in FY25.
What is the potential risk of Trump's tariffs?
There is a risk of tariffs being raised to 200 percent on pharmaceuticals, and future decisions could eliminate exemptions for smartphones.
