Trump doubles tariff from Aug 27: Indian labour-intensive goods face over 50%, pharma, tech remain spared

Prime Minister Narendra Modi and US President Donald Trump

US President Donald Trump’s 50 percent tariff on Indian exports is set to come into effect from August 27 after the Department of Homeland Security confirmed that steeper duties will kick in from 12:01 am Eastern Daylight Time.

Moneycontrol lists out the different tariff rates on key Indian exports.

Indian exports worth roughly around $48.2 billion will be subject to 50 percent tariffs from August 27, according to government’s estimate.

India exported goods worth $86.51 billion to the US in FY25, out of which the top five accounts for almost $60 billion of all outbound shipments to American shores.

The country’s top export to the US that is engineering goods at $19.16 billion in FY25, will face 50 percent tariff. Key inputs used by this sector such as steel and aluminum have been facing this rate since April.

Labour-intensive exports to the US are expected to take the hardest hit as these sectors will face a rate of more than 50 percent given that Trump’s reciprocal tariffs are over and above the most favoured nation (MFN) duties in place.

India’s fourth-largest export item – gems and jewellery worth $9.94 billion will face an effective tariff rate of 52.1 percent, while the fifth largest item - ready-made garments will face a levy of up to 63.9 percent, shipments of which amounted to $5.33 billion in FY25.

India’s overall exports of textiles and apparel to the US that stood at $10.8 billion.

Shrimps’ exports worth $2.4 billion to the US will see total tariffs rise to 60 percent, while shipments of carpets that stood at $1.2 billion in FY25 will face 52.9 percent effective duties.

Leather and footwear as well as agriculture and processed food will too face steeper 50 percent tariffs.

Organic chemicals will face a total tariff rate of 54 percent, while machinery and mechanical appliances will see effective duties rising to 51.3 percent. To be sure, these exports have relatively lower reliance on the US market.

India’s auto component exports to the US stood at $6.6 billion in 2024. Of this, $3.4 billion, mainly parts for cars and small trucks will face a 25 percent tariff, while the rest will be subject to 50 percent.

However, the country’s second and third-largest exports to the US remain in the exclusion list, with electronic goods shipments worth $14.64 billion and drugs and pharmaceuticals amounting to $10.52 billion in FY25 exempted from steeper duties so far.

In the exemption list are also petroleum products, exports of which stood at $4.1 billion in FY25, books, brochures, plastics, cellulose ethers, ferromanganese, ferrosilicon manganese, ferrochromium and computing gear such as motherboards and rack servers.

Estimates from Global Trade Research Initiative (GTR) says that around $27.6 billion will escape steeper duties for now. It also sees a higher $60.2 billion worth of Indian exports impacted by Trump’s 50 percent tariff.