As US President Donald Trump on Wednesday announced a 50 per cent tariff on imports from India, shipments worth over $30 billion — including pharmaceuticals and certain electronic items such as smartphones, semiconductors, and energy products — remain exempt from the hike, as they continue to be on the exemption list.
India exported drugs and pharmaceuticals as well as electronics (primarily smartphones) worth $10.5 billion and $14.6 billion respectively in FY25, together accounting for 29 per cent of the country’s total outbound shipments to the US.
Petroleum exports, valued at $4.09 billion in FY25, are also currently safe from the new tariff imposition, with energy still part of the exemption list. In total, Indian exports to the US stood at $86.51 billion in FY25.
Trump’s new tariffs, set to come into effect in the next 21 days, have so far spared these key sectors.
India’s exports to the US have grown since January this year, benefiting from these exemptions, as no additional duties currently apply to these goods. From January to June 2025, the US share in India’s merchandise exports rose from 17–18 per cent to over 20 per cent.
This growth reflects front-loading by exporters ahead of the upcoming tariff hike in August and the continued exemptions for smartphones and pharmaceuticals, which were also left out of the 10 per cent baseline duty introduced in April, according to industry experts.
However, despite the growth in US-bound exports, India’s overall export performance has remained subdued. Total exports grew by less than 2 per cent in Q1 FY26 and contracted by over 4 per cent in Q4 FY25, according to data from the Commerce Ministry.
Nevertheless, exports to the US accounted for approximately 23 per cent of India’s total shipments in both Q1 FY26 and Q1 FY25.
The risk of escalation remains, with Trump earlier warning of tariffs as high as 200% on foreign-made drugs. The current exemption for smartphones, too, could face a policy rethink going forward.
India’s exports to the US totalled $25.52 billion in Q1 FY26 — an increase of nearly 23 per cent year-on-year. For the quarter, total bilateral trade stood at $32.41 billion, while full-year trade in FY25 crossed $86 billion, according to the Commerce Ministry.
IANS