Trump hits Indian exports with 25% tariff: From textiles to tech, what will get costlier

Trump announces 25% tariff on India

US President Donald Trump announced the imposition of a 25% tariff on imports from India starting August 1.

The announcement, made via his Truth Social platform, was justified by what Trump described as India’s excessively high tariffs and restrictive trade practices.

“India is our friend," Trump wrote, “but we have done relatively little business with them because their tariffs are far too high… and they have the most strenuous and obnoxious non‑monetary trade barriers of any country."

He further added, “Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country.”

A closer look at the impact of Trump’s tariffs on India

Textiles and apparel

India supplies around one-third of US imports in textiles and apparel. Industry experts fear the country could lose its edge to lower-cost competitors like Bangladesh and Vietnam, especially in high-margin fashion and specialty fabrics.

“Our main export sectors to the US are pharma, electronics, gems and jewellery and textiles and apparel,” said Rahul Ahluwalia, founder-director at the Foundation for Economic Development, told India Today.

Gems and jewellery

The US is the largest market for India’s gem and jewellery exports, accounting for over $10 billion, or nearly 30% of total trade.

“The Indian gem and jewellery sector, in particular, stands to be severely impacted... A blanket tariff of this magnitude will inflate costs, delay shipments, distort pricing, and place immense pressure on every part of the value chain—from small karigars to large manufacturers,” said Kirit Bhansali, Chairman of the Gem and Jewellery Export Promotion Council told Moneycontrol.

Auto components

India exported $2.2 billion worth of automobile components to the US in FY24, making up 29.1% of its total exports in this category. The new tariffs could significantly raise supply chain costs and shrink margins. Companies like Tata Motors and Bharat Forge are expected to face reduced demand in high-value parts, potentially resulting in job losses.

Electronics and solar equipment

The US accounted for 97% of India’s photovoltaic exports in FY23 and 99% in FY24. Smartphone and solar panel manufacturers, already operating on thin margins, may face falling sales and profitability.

Marine products and miscellaneous goods

Exports worth over $9 billion including marine products will now be subject to the new tariff. Exporters may have to raise prices, absorb costs, or quickly find new markets to sustain operations.