Over $25 billion of Indian exports dodge Trump’s new tariffs as pharma, smartphones stay duty-free

US President Donald Trump with Prime Minister Narendra Modi

US President Donald Trump on July 30 announced a 25 percent plus tariff on India citing higher duties levied by New Delhi. While this immediately threatens India’s labour-intensive exports to American shores, shipments worth over $25 billion covering pharmaceuticals and smartphones 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.

Trump has exempted pharmaceuticals and certain electronic products such as laptops, smartphones from reciprocal tariffs as of now.

This is key since the US’s overall share in Indian exports have been rising since January 2025 owing to higher exports of smartphones thanks to zero duties.

In fact, the US’s overall share in India’s merchandise exports rose to over 20 percent since January till June 2025 as against the earlier trend growth of 17-18 percent.

While, this indicated front-loading by exporters amid fears of higher tariffs from August, it was also a result of India’s key exports — smartphones and drugs being exempted from the 10 percent baseline duty imposed on all goods entering American shores since April.

Share of outbound shipments to the US in India’s overall exports stood at about 23 percent in the June quarter of FY26 as well as in January to March of the previous fiscal.

This even as the country’s overall exports grew less than 2 percent in the first quarter of the current fiscal and contracted over 4 percent in the last quarter of FY25, official data from Ministry of Commerce shows.

To be sure, risks remain. Trump has threatened tariffs up-to 200 percent on foreign-made drugs, while smartphones may lose their exemptions depending on any unpredictable decisions by his administration.

India’s petroleum exports 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. But, the US President his yet to specify the nature of an additional penalty he intends to impose linked to India’s energy and arms purchases from Moscow.

The United States’ is not only New Delhi’s largest export destination but also its fourth-largest import source nation.

As per latest official data, India’s exports to the US in April to June of the current financial year touched $25.52 billion, a growth of nearly 23 percent on-year.

Trade between the two nations stood at $32.41 billion in the first quarter of the current fiscal, according to commerce ministry data, while in FY25 it stood at over $86 billion.

US President Donald Trump was first expected to implement country-specific tariffs from July 9, which was then pushed to August 1.

India is presently negotiating a Bilateral Trade Agreement (BTA) with the US even as Trump will levy a steeper tariff along with an unspecified penalty, specifically linked to Indian exports due to New Delhi’s trade ties with Russia.

However, later on July 30, Trump said steeper tariffs on India was also partially on account of India's ties to BRICS.

BRICS, a group of five key economies — Brazil, Russia, India, China and South Africa—expanded to 10 members from January 1, 2024, with Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE) joining.

India is a founding member of BRICS.