India’s exports to US could face $5.76 billion decline in 2025 due to tariff hikes

India’s merchandise exports to the United States are projected to decline by a staggering $ 5.76 billion this 12 months, primarily due to the rise in tariffs imposed by the US.
According to a report by the Global Trade Research Initiative (GTRI), exports from key sectors reminiscent of marine objects, gold, electronics, and electrical merchandise are anticipated to bear the brunt of the tariff hike, as reported new company PTI. However, India’s aggressive edge in sure product segments could assist mitigate a few of these losses.
Major declines in electronics, seafood, and gold exports anticipated
The US has introduced a 26% extra tariff on Indian items (excluding prescription drugs, semiconductors, and sure power merchandise) beginning April 9. This transfer comes on prime of the ten% baseline tariffs which have been in impact from April 5-8. According to GTRI, the overall influence will end result in a 6.41% drop in India’s exports to the US in 2025, following a robust export efficiency of $ 89.81 billion in 2024.
The sectors possible to face main losses embrace fish and crustaceans (a 20.2% decline), iron and metal articles (down by 18%), diamonds and gold merchandise (a 15.3% drop), car and components exports (12.1% discount), and electronics and telecom merchandise (12% decline). Other classes reminiscent of plastics, carpets, petroleum merchandise, and equipment are additionally anticipated to endure.
Textiles and prescription drugs resilient
Despite these setbacks, some sectors are projected to expertise modest positive aspects. Products like textiles, attire, ceramic objects, inorganic chemical substances, and prescription drugs could carry out higher due to India’s established aggressive place in these classes.
High-value merchandise reminiscent of power items, together with petroleum, photo voltaic panels, and prescription drugs, stay exempt from these particular tariffs, they usually accounted for $ 20.4 billion (22.7%) of India’s whole exports to the US in 2024. These items will proceed to face solely the usual Most Favoured Nation (MFN) tariffs.
However, the biggest influence is anticipated to fall on a broad basket of products valued at $ 67.2 billion, which is able to now be topic to the 26% tariff improve. This sweeping hike will possible reshape commerce dynamics throughout quite a few industries.
India’s electronics and smartphones exports to the US, which reached $ 14.4 billion in 2024 (accounting for 35.8% of its international shipments in this class), are anticipated to see a big decline. The new tariff hike could cut back these exports by 12%, or $ 1.78 billion, inserting stress on India’s place because the fourth-largest provider of electronics and smartphones to the US.
Seafood exports from India are additionally possible to endure vastly. The US imported $ 2 billion price of frozen fish and shrimp from India in 2024, which beforehand entered the market duty-free. With the brand new 26% tariff, seafood exports are anticipated to fall by 20.2%, or $ 404.3 million, as Indian merchandise now face stiff competitors from Canada, which advantages from a tariff exemption below the USMCA commerce pact.
Gold, auto components, and diamonds
Exports of gold jewelry and minimize and polished diamonds to the US are projected to decline by 15.3%, or roughly $ 1.82 billion. The new tariffs, mixed with India’s comparatively low worth addition in this sector, will possible erode its share of the US market, which accounted for 40% of India’s whole exports of those merchandise in 2024.
Similarly, car and auto components exports, valued at $ 2.8 billion in 2024, are anticipated to fall by 12.1%, or $ 339.4 million, below the brand new tariff regime. Currently, the import obligation on these merchandise stands at simply 1%, however with the tariff hikes, the sector is poised for a slowdown.
A fancy image with a number of variables forward
GTRI notes that the evaluation is predicated on detailed knowledge, nevertheless it does have its limitations. The examine assumes that change charges, international demand, and different variables stay fixed, which is probably not the case in real-world eventualities. Additionally, the examine doesn’t have in mind how shortly Indian exporters can adapt to these adjustments, shift markets, or regulate pricing methods in response to the brand new tariffs.