Which Indian exports are least impacted by Trump’s 50% tariff shock

US President Donald Trump’s decision to impose an additional 25% tariff on Indian goods on top of the reciprocal duties has raised concerns among businesses which depend heavily on exports.

Trump’s executive order, Addressing Threats to the US by the Government of the Russian Federation, which will come into effect on August 27, imposes an additional 25% duty on top of a previously announced 25% levy, taking total tariffs on Indian goods to one of the highest levels imposed on any US trade partner.

The 25% ‘Reciprocal Tariff, Adjusted’ imposed on India came into effect on Thursday.

Experts have warned that the 50% cumulative tariff imposed by the United States will severely impact domestic export sectors such as leather, chemicals, footwear, gems and jewellery, textiles and shrimp.

The Global Trade Research Initiative (GTRI) said that the increased tariffs are expected to make Indian goods far costlier in the US and could cut US-bound exports by 40–50%.

However, nearly $30 billion worth of Indian exports have been spared from the tariff barrage, thanks to their inclusion in the exemption list.

Sectors least impacted

Drugs, pharmaceuticals, and electronics (mostly smartphones and computing devices) made up a combined $25.1 billion of India’s exports to the United States in the fiscal year ended March 2025, accounting for 29% of total exports to the country.

The 50% tariffs will not be applicable on the exempted categories including finished pharmaceutical drugs, active pharmaceutical ingredients (APIs), and other key drug inputs; energy products such as crude oil, refined fuels, natural gas, coal, and electricity; critical minerals; and a wide range of electronics and semiconductors, including computers, tablets, smartphones, solid-state drives, flat panel displays, and integrated circuits.

These categories of exports were also excluded from the 25% tariff announced on July 30.

To be sure, Trump has threatened tariffs up to 250% on foreign-made drugs, while smartphones may lose their exemptions depending on any unpredictable decisions by his administration.

The US president said he would be announcing tariffs for the pharma industry “within the next week or so”.

Generic medicines, which typically operate on razor-thin margins, are important for affordable healthcare in the United States.

The initial 25% tariffs announced by the US on Indian imports came into effect Thursday, with President Donald Trump saying billions of dollars from countries that have taken advantage of America will now start flowing into the country.

“It’s Midnight!!! Billions of Dollars In Tariffs Are Now Flowing Into The United States Of America!” Trump said in a post on Truth Social as the clock struck 12 midnight in the US, ushering in the August 7 date when the reciprocal tariffs announced on nations by Trump last week come into effect.

"Reciprocal tariffs take effect at midnight tonight! Billions of dollars, largely from countries that have taken advantage of the United States for many years, laughing all the way, will start flowing into the USA. The only thing that can stop America’s greatness would be a radical left court that wants to see our country fail!” Trump said in another post.