ICRIER Report: US Tariffs Hit 60.8 Billion Dollars Worth of Indian Exports, Key Sectors at Risk

New Delhi [India]: Around 70 per cent of India’s goods exports to the United States, worth USD 60.85 billion, are now exposed to a 50 per cent tariff imposed by the US administration, according to an analysis by the Indian Council for Research on International Economic Relations (ICRIER).

Though significant, this amounts to only 1.56 per cent of India’s GDP and 7.38 per cent of total exports, making it manageable for a USD 3.9 trillion economy. The report, titled “Navigating Trump’s Tariff Blow” and authored by Ashok Gulati, Sulakshana Rao, and Tanay Suntwal, highlighted that the brunt of the impact falls on labour-intensive and high-value sectors such as textiles and apparel, gems and jewellery, auto parts, and agricultural products, especially shrimp.

“These sectors not only anchor merchandise exports to the US but also directly affect employment generation and the livelihoods of millions of workers and farmers,” the report stated.

The textiles and apparel industry faces a tariff disadvantage of over 30 percentage points compared to competitors like Bangladesh, Pakistan, and Vietnam. Similarly, India’s USD 11.9 billion worth of gems and jewellery exports are vulnerable against suppliers from Turkey, Vietnam, and Thailand. Auto parts, making up 3 per cent of Indian exports to the US, also face setbacks. Shrimp exports will be hardest hit, with tariffs higher than those faced by Ecuador, Indonesia, and Vietnam, in addition to existing anti-dumping and countervailing duties.

ICRIER warned that these are sectors where US buyers can switch suppliers quickly, giving importers greater bargaining power. It recommended a three-pronged response: smart negotiations with logic and rationality, immediate and targeted relief for hard-hit sectors, and accelerated diversification of export markets.

US President Donald Trump initially imposed a 25 per cent tariff on Indian goods before doubling it to 50 per cent, citing India’s continued import of Russian oil. Competitors such as Vietnam (20 per cent), Bangladesh (18 per cent), and Japan and South Korea (15 per cent) continue to enjoy lower tariff rates. Pharmaceuticals, energy products, critical minerals, and semiconductors remain exempt.

India and the US are currently negotiating a Bilateral Trade Agreement (BTA), with the first stage expected by late 2025. However, differences remain, particularly on US demands to open India’s agriculture and dairy sectors. Commerce and Industry Minister Piyush Goyal recently told Parliament that the government is closely examining the impact of the new tariffs and will safeguard national interests.

The Ministry of External Affairs (MEA) also defended India’s imports of Russian oil, describing them as essential for ensuring affordable energy. It called the targeting of India “unjustified and unreasonable,” reaffirming that India will take necessary measures to protect its economic security.