Nearly 30 percent of India’s export to US to face over 15% tariff: MC Analysis

Trump's tariffs will raise cost for $19 billion of trade over 15%

Nearly $19 billion or 30 percent of exports from India to the US, which is open to tariffs after discounting for exemptions, will face 15 percent or more in duties while entering American shores, according to a Moneycontrol analysis.

On April 9, US President Trump paused country-wise reciprocal tariffs, levying a flat 10 percent duty on imports from all nations. This implies that ust over a tenth of Indian goods exported to the US faced more than 10 percent tariff rate in 2024, according to the analysis. Of the 3,451 categories imported by India to the US worth $4.7 billion faced over 10 percent tariff from the US.

Taxing Times 

The steepest increase comes from steel and aluminium, which have been levied with tariff rate of 25 percent, with auto components too attracting a levy of 25 percent tax on US imports. Besides, coffee, tea and spices, which until 2024 attracted no duty, will attract 10 percent duty beginning this year. Fish and shrimps too are expected to attract 10 percent more duty than they did a year ago.

The Rising Burden of Tariff

While just about $80 million worth of export from India to the US attracted over 30 percent duty, from this year onwards, $459 million worth of products may face a tax rate of over 30 percent.

Certain tobacco products, worth $30 million, will attract nearly 100 percent duties from this year. Cane sugar and groundnuts will attract over 50 percent tariff from the US.

The weighted average tariff from the US, which was 2.2 percent in 2023, will rise to 12.2 percent, more or less equivalent to what India charges the US.

However, a Moneycontrol analysis shows that tariffs on some items are going to extract a heavy burden from the US consumers.

For instance, on cucumbers, tractors, bed sheets and capsicum - categories where India had over 70% share in US imports of goods from the world - tariff increases will weigh down on US consumers in the shorter run.