Synopsis: The US has spared key Indian exports like smartphones, laptops, and medicines from a 25% tariff hike. This exemption protects over $25 billion worth of goods and boosts India’s trade confidence amidst global tensions.
In a major relief for Indian exporters, the United States has excluded critical Indian goods from its newly announced 25% tariff hike. While US President Donald Trump has imposed steep tariffs on a wide range of imports from India, key sectors like electronics and pharmaceuticals — valued at over USD 25 billion — have been spared for now.
This development is a significant boost for India, as electronics and pharmaceutical products together accounted for nearly 30% of India's total exports to the US in FY 2024-25. Specifically, India exported USD 14.6 billion worth of electronic goods and USD 10.5 billion in medicines during that period.
President Trump’s move, while tough on general trade, spares these high-value goods due to their current importance in the US supply chain. However, there remains a looming risk: Trump has warned of potential future hikes — possibly up to 200% on pharmaceutical products and further duties on electronics — if India continues strong economic ties with Russia.
Despite rising geopolitical tensions and Trump’s dissatisfaction with India’s trade practices and its role in BRICS, India’s exports to the US have been growing. From January to June 2025, US purchases rose to over 20% of India’s total exports — a jump from the usual 17–18%.
In Q1 of FY 2025-26 (April–June), exports to the US accounted for 23% of India’s total global exports, showing resilience even as overall export growth remained below 2%. By contrast, Q4 of FY 2024-25 saw a decline of over 4%.
The temporary tariff relief also includes vital energy exports like petroleum, which brought in over USD 4 billion in FY 2024-25. This ongoing trade engagement suggests that despite diplomatic strains, both nations are still invested in preserving economic ties — with ongoing talks for a potential trade agreement.
According to official data, India’s exports to the US reached USD 25.5 billion in the April–June 2025 period, marking a 23% rise from the previous year. Total bilateral trade stood at USD 32.4 billion for the quarter, and exceeded USD 86 billion for the full financial year 2024-25.
Disclaimer: This article is based on current reports and publicly available data. Future policy changes or geopolitical developments may affect the outcomes discussed.
