NEW DELHI— Despite former U.S. President Donald Trump’s announcement of a 25 percent tariff on Indian imports, key Indian export sectors—pharmaceuticals and electronics—remain unaffected for the time being, securing over $25 billion worth of shipments.
In FY25, India exported $10.5 billion worth of pharmaceuticals and $14.6 billion in electronics, primarily smartphones, to the U.S. These categories have not been included in the new tariff measures slated to take effect from August 1.
The exemption has fueled growth in India’s exports to the U.S. since January 2025. From January to June, the U.S. share of India’s total merchandise exports rose from 17–18 percent to over 20 percent. Industry analysts say this reflects both front-loading of shipments in anticipation of the tariff rollout and the benefit of exemptions from the baseline 10 percent duty introduced in April.
While India’s overall export growth was modest—less than 2 percent in Q1 FY26 and a contraction of over 4 percent in Q4 FY25—exports to the U.S. remained a bright spot. U.S.-bound shipments accounted for approximately 23 percent of India’s total exports in both the June quarter of FY26 and Q1 of FY25, according to data from the Commerce Ministry.
However, the outlook carries risks. Trump has previously floated the idea of imposing tariffs of up to 200 percent on foreign-manufactured drugs, which could affect India’s pharmaceutical sector. Similarly, exemptions on smartphones could be reconsidered depending on future U.S. trade decisions.
Energy exports, including India’s $4.09 billion in petroleum shipments to the U.S., remain untouched by the new tariffs, as energy is currently excluded. The status of potential penalties related to India’s defense and energy ties with Russia remains unclear.
In Q1 FY26, India’s exports to the U.S. totaled $25.52 billion—up nearly 23 percent from the same period last year. Bilateral trade for the quarter reached $32.41 billion, while total trade in FY25 exceeded $86 billion.
Trump has partly justified the new tariffs by pointing to India’s BRICS membership and its ongoing strategic relationship with Russia. (Source: IANS)
