India’s major exports worth nearly $8.5 billion, which are heavily reliant on the US market, are at risk as US President Donald Trump doubled tariffs on Indian goods to 50 percent starting August 27, a Moneycontrol analysis shows.
Starting August 27, India’s effective tariff at 31.2 percent would stand double that of Vietnam and the Philippines, and significantly above South Asian peers such as Pakistan and Bangladesh.
The US imported $91.2 billion worth of goods from India last year, according to US trade data. Of this, the top 50 export categories (excluding steel, pharmaceuticals, and automobiles, which are exempt or excluded from the new tariffs) accounted for $31.4 billion. Within this, $8.5 billion came from sectors where the US absorbed more than half of India’s outbound shipments, underscoring the challenge of finding alternative markets.
Solar modules top the list of at-risk exports. The US accounted for 98 percent—or $1.6 billion—of India’s shipments. India’s new FTAs with partners like the UK, UAE, and Australia are unlikely to provide much relief as these markets lack the capacity to absorb such volumes.
Textile sector is expected to bear the brunt of tariffs.
Wool carpets and other bed linen exports, collectively valued at around $1 billion, are equally vulnerable given their dependence on American consumers.
Similarly, over 88 percent of India’s cement and artificial stone exports were US-bound, worth more than half a billion dollars. Printed cotton linen and plastic-coated textiles also show over 80 percent reliance on the US market. Prepared shrimps and prawns worth $420 million—80 percent of India’s shipments—were also largely absorbed by US buyers.
But Washington would also find it difficult to wean away from such items. Over 80 percent of US’ imports of shrimp are accounted for by India.
Easier-to-Diversify Segments
Around 11 percent of India’s exports to the US—worth about $10 billion—are less dependent on the American market, with the US accounting for less than 30 percent of India’s shipments. Categories such as rubies, sapphires, and pneumatic tyres could more easily be redirected elsewhere.
Even though they are replaceable for India, the US remains highly dependent on Indian suppliers. India accounted for 92 percent of US synthetic diamond imports, 63 percent of bulk bags, 60 percent of knotted carpets, and 54 percent of tyres for agricultural and forestry machinery. Cotton linen, worth nearly $1 billion, also falls into this hard-to-replace basket.
Nearly $17 billion of exports—about 18.9 percent of India’s major trade items—could be more easily substituted by the US due to India’s smaller market share.
The impact on India’s growth is expected to be limited, economists note, with measures like GST helping to offset some of the negative impact of Trump’s tariffs owing to the consumption boost.
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