New Delhi, Apr 7 (KNN) A recent analysis by the Global Trade Research Initiative (GTRI) suggests India’s merchandise exports to the United States could decline by USD 5.76 billion or 6.41 percent in 2025 due to increased American duties.
The US has implemented additional 26 percent tariffs on Indian goods starting April 9, with 10 percent baseline tariffs effective from April 5-8, exempting pharmaceuticals, semiconductors, and certain energy products.
Several key Indian export sectors are expected to experience significant reductions. Fish and crustaceans may see a 20.2 percent decrease, iron or steel articles could drop by 18 percent, and diamond and gold product exports might fall by 15.3 percent.
Vehicle and parts exports are projected to decline by 12.1 percent, while electrical, telecom, and electronic product exports could decrease by 12 percent.
Other categories facing negative impacts include plastics, carpets, petroleum products, organic chemicals, and machinery.
The GTRI study evaluated sector-specific exposure, tariff rate changes, and competitive dynamics involving key trading nations like China, Mexico, and Canada.
Energy products, pharmaceuticals, and copper—representing USD 20.4 billion or 22.7 percent of India’s exports to the US—will remain subject only to standard Most Favored Nation (MFN) tariffs, avoiding the new country-specific duties.
Key industrial goods such as steel, aluminum, automobiles, and auto parts, which account for USD 2.2 billion or 2.5 percent of India’s US exports, will face a 25 percent tariff.
However, the largest impact will be felt across a diverse basket of goods valued at USD 67.2 billion—74.8 percent of total trade—now subject to the 26 percent tariff increase.
India’s electronics and smartphone exports to the US, which reached USD 14.4 billion in 2024 and represented 35.8 percent of its global shipments in this category, are particularly vulnerable.
Despite the current average import duty of just 0.4 percent, these products now face steep tariffs that could reduce exports by approximately USD 1.78 billion.
India currently ranks as the fourth-largest supplier of electronics and smartphones to the US market with a 6.68 percent share, behind China, Mexico, and Vietnam.
The seafood sector may also be severely impacted. The US imported USD 2 billion worth of Indian frozen fish and shrimp last year, comprising nearly one-third of India’s global exports in this category.
Previously duty-free, these products now face a 26 percent tariff, potentially causing exports to fall by USD 404.3 million, especially as Canadian products remain tariff-free under the USMCA trade agreement.
Gold jewelry and diamond exports, previously subject to just 2.1 percent duty, are projected to decline by 15.3 percent or approximately USD 1.82 billion.
India exported USD 11.9 billion worth of these products to the US in 2024, with America accounting for 40 percent of India’s global exports in this category.
Despite these projections, GTRI acknowledges several limitations in its assessment. The analysis assumes that other factors such as exchange rates, global demand, supply chain dynamics, and non-tariff barriers remain constant.
It also does not account for how quickly Indian exporters might adapt, shift markets, or adjust pricing strategies in response to these tariff changes.
Not all sectors will be negatively affected, according to the think tank. Some areas that may witness modest gains include textiles, apparel, ceramic products, inorganic chemicals, and pharmaceuticals, as India’s competitive position in these segments could help cushion some of the overall losses.
(KNN Bureau)
