India’s exporters are grappling with sweeping US tariffs that now cover almost 70 percent of outbound shipments to America, valued at roughly $60.85 billion. While the duties look alarming, a fresh analysis from the Indian Council for Research on International Economic Relations (ICRIER) suggests the overall impact is less severe in macroeconomic terms, affecting just 7.38 percent of India’s total exports and about 1.56 percent of GDP.
The report, Navigating Trump’s Tariff Blow, authored by Ashok Gulati, Sulakshana Rao, and Tanay Suntwal, highlights that the real damage lies in labour-intensive and high-value industries. Textiles and apparel, gems and jewellery, auto parts, and agriculture are among the most vulnerable sectors, with millions of livelihoods tied to their performance. The textiles sector faces the steepest disadvantage, losing more than 30 percentage points in tariff competitiveness compared with rivals like Bangladesh, Pakistan, and Vietnam. Similarly, India’s $11.9 billion gem and jewellery exports now risk being undercut by suppliers from Turkey, Thailand, and Vietnam.
Agriculture is expected to suffer a particularly harsh blow, with shrimp exports hit hardest. Already burdened by anti-dumping measures, Indian shrimp will now be subject to 50 percent tariffs, handing countries like Ecuador, Indonesia, and Vietnam a decisive cost advantage. Auto parts, accounting for 3 percent of exports to the US, also fall within the scope of heightened levies, further eroding India’s trade share.
In its recommendations, ICRIER calls for a three-pronged approach: engage in smart negotiations grounded in economic logic, roll out immediate relief measures for the hardest-hit sectors, and accelerate diversification into alternative markets. The think tank underlines that while tariffs are disruptive in the short term, India’s long-term strategy should focus on reinforcing its reputation as a dependable global trade partner.
The tariff escalation follows President Donald Trump’s decision to double duties on Indian goods to 50 percent after initially setting them at 25 percent. Washington cited India’s continued imports of Russian oil as the justification, despite New Delhi’s insistence that the purchases are essential for energy security. Pharmaceuticals, energy, minerals, and semiconductors remain untouched by the new duties, offering India some relief in key industries.
Commerce Minister Piyush Goyal has assured Parliament that the government is closely monitoring the impact and will take “all necessary steps” to defend India’s economic interests. Negotiations for a Bilateral Trade Agreement (BTA) are underway, with both sides hoping to narrow differences on sensitive issues like agricultural and dairy market access by late 2025. Meanwhile, the Ministry of External Affairs has reiterated that energy imports from Russia remain critical to ensuring predictable and affordable supplies, describing the US measures as “unjustified and unreasonable.”