Trump's 50% Tariff Penalty Kicks In On Indian Goods, From Aug 27—Which Sectors To Face Biggest Blow?

The United States President Donald Trump imposed an additional tariff of 25% on goods imported from India this week, citing New Delhi's continued purchase of Russian oil.

How Will This Affect Different Sectors?

The new import tax will raise duties on items like Indian goods to as high as 50% - among the highest levied on any US trading partner.

However, certain sectors like smartphones, pharmaceuticals and energy are currently exempt from any reciprocal tariff, and other items like gems and jewellery, textiles and some auto components, which make up a large part of Indian exports to the US are going to take a hit.

Smartphones

Foxconn Hon Hai, the suppliers of Apple Inc, Tata Electronics, Pegatron Corp as well as Wistron Infocomm are the largest exporters from India to the U.S., shipping smartphones and other products worth nearly $7 billion in 2024. In the first six months of 2025, the companies have already exported goods worth $11 billion, commercially available customs data showed.

Smartphones are exempt from tariffs at present, in a win for Apple which is also gearing up to launch iPhone 17 next month and has gradually increased manufacturing in India as it diversifies from China. Most iPhones which are sold in the US are now made in India.

Pharmaceuticals

Dr Reddy's Labporatories, Zydus Lifesciences, Hetero Labs, Lupin, Aurobindo Pharma and Sun Pharmaceutical are among the top exporters of drugs and active pharmaceutical ingredients to the U.S.

In 2024, these companies shipped goods worth $3.6 billion and from January to June 2025 they have already exported drugs worth $3.7 billion to the U.S.

Currently, this sector is exempt from tariffs as generic medicines are crucial for affordable healthcare.

Gems & Jewellery

US is one of the largest markets for Indian gems and jewellery sector and accounts for goods worth $10 billion last year, making up nearly 30% of its total global sales.

India's Gem & Jewellery Export Promotion Council has warned that the tariffs could bring the industry to a standstill, especially with competing manufacturing hubs such as Turkey, Vietnam and Thailand being taxed at lower rates, as per a Reuters report.

Textiles

The Indian textile industry is receiving calls from customers after Trump announced the additional 25% tariff. The industry is going to face a 50% tariff in all likelihood.

In 2024, the companies exported goods worth over $2 billion and in the first half of 2025 shipped products of about $1 billion to U.S. clients.

Auto Components

The auto components sector in India, has grown rapidly over the last few years and is one of the few industries that records a trade surplus. The U.S. is its largest export market, making up close to a third of global trade.

In 2024, India exported components worth $6.6 billion to the U.S. Of this, over $3.5 billion comprised parts for cars and small trucks that are currently exempt from the 50% tariff and will pay just 25%, the report added.

However, export of commercial vehicle components like large trucks and agriculture equipment, worth about $3 billion, will attract a 50% tariff.

Energy & Renewables

According to the report, manufacturers of solar equipment like cells and modules, wind turbines and other energy products have significant exports to the U.S. but with little to worry about so far as they are exempt from tariffs.

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