Merchandise exports to US rose 23% to $25.51 bn in Q1FY26 

The imposition of a 25 per cent US tariff will impact about half of India's over USD 86 billion worth of exports to America, government sources said on Friday. 

The sectors which could bear the brunt of 25 per cent duty include textiles/ clothing (10.3 billion), gems and jewellery (12 billion), shrimp (USD 2.24 billion), leather and footwear (USD 1.18 billion), animal products (USD 2 billion), chemicals (2.34 billion), and electrical and mechanical machinery (about USD 9 billion).

They said that about half of the goods exported from India to the US are in the exemption category (such as pharma and electronic goods), so, the impact will be only on the remaining half.

"More than half of India's exports to the US will not be impacted by the duty. Due to the Section 232 exemption of the US, only exports worth about USD 48 billion would be impacted with these tariffs," they said, adding the remaining exports will have a little impact on a country with a GDP of about USD 4 trillion and a consumer base of 140 crore.

According to GTRI, the 25% tariffs will not be applicable on the exempted categories, including finished pharmaceutical drugs, active pharmaceutical ingredients (APIs), and other key drug inputs; energy products such as crude oil, refined fuels, natural gas, coal, and electricity; critical minerals; and a wide range of electronics and semiconductors, like computers, tablets, smartphones, solid-state drives, flat panel displays, and integrated circuits.

Fuel exports escape Trump's tariff net, no Russian penalty yet India's exports of petroleum products like diesel and jet fuel to the US continue to be exempted from the levy of any import duty or tariff, and President Donald Trump has, for now, not indicated the penalty he plans to impose to deter New Delhi's energy trade with Russia. However, the executive order he signed thereafter only gives effect to the 25 per cent tariff on Indian goods coming to the US. Even this has an exclusion list that includes finished pharmaceutical products (tablets, injectables and syrups), active pharmaceutical ingredients, electronics and ICT goods (semiconductors, smartphones, SSDs and computers), and petroleum products (crude oil, LNG, refined fuels, electricity and coal).

The executive order also does not indicate any penalty that is to be levied for Russian trade. According to official data, India exported 4.86 million tonnes of petroleum products to the US in fiscal year 2024-25 (April 2024 to March 2025) for over USD 4 billion.