Will the US tariff hike only affect 4.8 percent of India’s total exports?

New Delhi, Aug 7 (NationPress) In a recent announcement, US President Donald Trump revealed a new 50 percent tariff on India's exports. However, this move is projected to affect only 4.8 percent of the country's total global goods and services exports, which soared past a record $820 billion in 2024-25, as per official estimates.

The tariffs will apply solely to exports valued at $40 billion to the United States, according to a senior official.

Exports exceeding $30 billion, including sectors such as pharmaceuticals and specific electronic goods like smartphones, semiconductors, and energy, remain shielded from these increased duties due to their inclusion on an exemption list.

In the fiscal year 2025, India exported $10.5 billion in pharmaceuticals and $14.6 billion in electronics (predominantly smartphones), making up 29 percent of its total shipments to the US.

Petroleum exports valued at $4.09 billion in FY25 are also currently protected from Trump's new tariffs as they are included in the exemption list. Overall, Indian exports to the US reached $86.51 billion in FY25.

Notably, Trump has yet to target these crucial industries with the impending tariffs, which are set to take effect in the next 21 days.

Since January of this year, India's exports to the US have seen an uptick, largely due to the exemptions that mean there are no tariffs on these goods. Between January and June 2025, the share of India's merchandise exports to the US rose from 17-18 percent to over 20 percent.

This growth is indicative of exporters rushing to ship goods ahead of the tariff increase in August, alongside the exemptions for smartphones and drugs, which were spared from the 10 percent baseline duty introduced in April, according to industry experts.

Although India's total exports grew by less than 2 percent in Q1 FY26 and contracted by more than 4 percent in Q4 FY25, Commerce Ministry data indicates that exports to the US accounted for approximately 23 percent of India's total shipments during the June quarter of FY26 and the first quarter of FY25.

However, potential risks remain, as Trump has warned of imposing tariffs as high as 200 percent on foreign-made drugs, and there is a possibility that exemptions for smartphones could also be revoked.

In Q1 FY26, India's exports to the US amounted to $25.52 billion, marking a nearly 23 percent increase compared to the previous year. For that quarter, total trade reached $32.41 billion, while FY25 figures exceeded $86 billion, according to Commerce Ministry data.