Set to be implemented today onwards, Trump’s new tariffs target India’s electronics sector, with iPhones and tech exports facing price hikes. This might potentially disrupt demand and impact major IT firms.
US President Donald Trump’s reciprocal tariff policy is set to take effect from today, threatening significant disruptions to Indian industries. The tariffs are a response to what Trump has called India’s “brutal” tariff policies on US goods.
According to a Business Standard report, India currently imposes an average tariff of 9.5% on US exports, while the US has a tariff of 3% on Indian products. This disparity, along with a $38 billion trade surplus in 2024, has heightened tensions in the trade relationship.
The tech sector, particularly India’s electronics and IT industries, is expected to face major challenges. Electronics exports, including iPhones assembled in India, could experience tariff hikes between 1.2% and 10.8%, potentially raising prices for US consumers.
This would affect demand for Indian smartphones, which make up a significant portion of India’s electronics exports to the US. Major IT firms such as Infosys and TCS have already seen stock price declines of up to 5% in anticipation of the tariffs.
The pharmaceutical sector, another key Indian export, could also be hit, though its impact may be less severe. Indian generics are highly valued in the US, and while higher tariffs could increase prices, demand for these drugs is unlikely to decrease significantly.
Companies like Cipla, Lupin, and Sun Pharma may face some challenges but remain crucial players in the US market.
The automobile sector is also an area of concern. Trump’s new 25% tariff on auto imports will affect India’s auto exports, including accessories and parts. However, the sector is somewhat insulated due to the nature of trade between the two nations. A wider range of auto parts may soon be included in the tariffs, adding to the pressure.
Other sectors at risk include gems and jewellery, textiles, and apparel. The jewellery sector, which sends 30% of its exports to the US, could face disruptions due to tariff hikes. Similarly, India’s textile exports, which account for 28% of the country’s total textile sales, may also suffer from the new tariffs.
