Caught in Washington’s tariff crossfire, Indian exporters brace for losses, while electronics and pharma escape the blow, offering a silver lining in an escalating trade tussle.
The United States will enforce steep 50% tariffs on a wide range of Indian exports from today, 27 August, following a draft notification issued by the US Customs and Border Protection (CBP). The move stems from President Donald Trump’s Executive Order 14329, signed earlier this month, targeting nations seen as supporting Russian trade.
The tariff effectively doubles existing duties by adding another 25% on top of the earlier levy. It will cover categories such as textiles, gems and jewellery, leather goods, machinery, furniture and marine products. However, pharmaceuticals, automobiles and, critically, electronics have been granted exemption.
The reprieve for electronics is significant, as the sector has emerged as one of India’s fastest-growing export segments. Mobile phones, semiconductors, printed circuit boards (PCBs) and consumer electronics accounted for billions of dollars in shipments to the US last year.
Industry experts say that retaining zero additional duty on these products will help India consolidate its position as a preferred supplier amid global supply chain realignments.
By contrast, exporters in traditional sectors such as textiles and gems expect sharp losses. The US remains India’s largest export destination for many of these goods, and finding alternative markets with comparable demand is expected to be difficult. Industry representatives warn of margin pressure, job losses and slower growth in labour-intensive sectors.
The Indian government has not announced retaliatory tariffs but has promised to support exporters. The Commerce Ministry has assured that “all possible measures” will be taken to cushion the impact of the trade dispute.
Prime Minister Narendra Modi, addressing concerns on Monday, vowed that his government would shield small producers, shopkeepers and farmers from the fallout.
According to a report by The New Indian Express, the Reserve Bank of India also stepped in, with Governor Sanjay Malhotra stating that special support measures are being planned for affected industries.
He expressed confidence that the overall economic impact would be contained and voiced hope for eventual resolution through negotiations.
External Affairs Minister S. Jaishankar has described the tariffs as unjustified and unreasonable. He stressed that while India is open to dialogue, its lines, particularly safeguarding the interests of farmers and small businesses, remain non-negotiable.
For now, exempted sectors, particularly electronics, are seeking to turn the crisis into an opportunity by expanding their market share in the US.
