The new round of US tariffs imposed by President Donald Trump has landed a heavy blow on India’s export economy, particularly in labour-intensive industries. Beginning this week, two-thirds of Indian goods entering the American market are subject to duties as high as 50 per cent , double the earlier rate of 25 per cent.
The most severely affected sectors include gems and jewellery, textiles and apparel, auto parts, seafood, carpets, handicrafts, leather goods, and agriculture. Gems and jewellery alone contribute $10 billion in exports to the US annually, about 40 per cent of India’s global trade in the segment. Surat’s diamond polishing units and Mumbai’s jewellery hubs are already reporting slower orders.
Seafood exporters, especially shrimp farmers, face similar disruptions. India shipped $2.6 billion worth of seafood to the US last year, but fresh contracts are now on hold. Textile and apparel shipments, worth $10.8 billion in FY2025, face a sharp tariff spike from 13.9 per cent to 63.9 per cent, threatening jobs across clusters in Tiruppur, Noida, and Bengaluru.
The auto components sector is also hit, with $6.6 billion in exports exposed to new tariffs. Car parts will now attract 25 per cent duties, while larger vehicle components face the full 50 per cent levy. Smaller industries such as carpets, handicrafts, leather, and agricultural goods worth billions are similarly impacted, putting artisans and farmers under stress.
However, not all exports are affected. Smartphones, electronics, pharmaceuticals, and renewable energy products remain exempt. India’s electronics exports, led by smartphone production, reached nearly $7 billion in 2024 and continue to grow. Generic drug exports, worth more than $3.6 billion annually, also remain tariff-free.
India has criticised the US decision, calling the move “unfortunate” and “unjustified.” Officials argue that imports from Russia are based on national energy security needs, and warn the new duties could cause job losses, lower competitiveness, and allow rivals like Vietnam, China, and Mexico to capture market share.