Trump Tariffs Could Slash India's US Exports by 30% to $60.6 Billion: GTRI

India’s exports to the US could decline by nearly 30% in FY26, dropping to $60.6 billion this fiscal. The fall follows the announcement of a 25% additional import duty on Indian goods by former US President Donald Trump. 

According to the Global Trade Research Initiative (GTRI), this puts India at one of the highest tariff disadvantages among Asian exporters.

Tariff Gap With Competitors

The new US tariff makes Indian goods more expensive compared to competitors. As per the reports, while Indian exports now face a 25% tariff, China stands at 30%. In contrast, countries like Vietnam, Bangladesh, Indonesia, and Malaysia face duties in the 18-20% range. Japan and South Korea are at 15%.

Garments, Textiles and Shrimp Exports Affected

India’s garment sector is expected to be among the worst hit. Both knitted and woven garments worth $2.7 billion each now face US tariffs of 38.9% and 35.3%. Towels and bedsheets, which bring in $3 billion in exports (nearly half to the US), are now subject to a 34% duty. Shrimp exports worth $2 billion will also face a 25% tariff.

Read more: US Tariff Hike Threatens Over 2 Million Jobs in Indian Apparel Sector!

Jewellery, Engineering Goods and Metals Impacted

Jewellery exports valued at $10 billion, 40% of India's global jewellery trade, now face a 27.1% US duty. Mechanical gold jewellery worth $3.6 billion is likely to take a significant hit. Engineering goods, including $6.7 billion in machinery and $2.6 billion in auto parts, now face over 26% tariffs. Metals exports of $4.7 billion may also see reduced demand.

Exemptions and Risks

Some sectors remain exempt for now, pharmaceuticals ($9.8 billion), smartphones ($10.6 billion), petroleum products ($4.1 billion), semiconductors, and critical minerals. However, GTRI notes the exemption may not last. There are also concerns over potential penalties related to the use of Russian crude.

Conclusion

With the US being India’s largest export destination, the new tariff structure could impact several key sectors unless corrective steps are taken.

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