About $30 billion in Indian exports escape Trump's 50% tariff on pharma, smartphones exemptions

About $30 billion of Indian exports dodge Trump’s 50% tariff escalation thanks to pharma, smartphone exemption

US President Donald Trump on August 6 doubled tariffs on India to 50-percent, targeting New Delhi for purchasing Russian arms and energy.

While this immediately threatens India’s labour-intensive exports to American shores, shipments worth around $30 billion covering pharmaceuticals and certain electronic products such as smartphones, semiconductors and energy are so far secure from steeper duties given that they are under an exemption list.

India exported drugs and pharmaceutical as well as electronics products (mostly smartphones) to the tune of $10.5 billion and $14.6 billion in FY25, constituting 29 percent of its overall outbound shipments to the US. Indian exports to the US stood at $86.51 billion in FY25

Ironically, India’s petroleum exports, which was worth $4.09 billion in FY25 are also currently secure from Trump’s fresh tariffs thanks to energy being in the exemption list as well.

These categories of exports were not subject to the earlier 25-percent tariff announced on July 30 as well.

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

In an executive order on August 6, the US indicated that those exempted from reciprocal tariffs, will continue to enjoy access to American markets at zero or lower duties so far.

Trump had first levied a 25-tariff on most Indian goods as talks for a mini-version of a trade deal to avert reciprocal levies failed, which kicks in from August 7.

India and the US are negotiating a Bilateral Trade Agreement (BTA), aimed at Fall of this year.