A Trump administration customs increase is possible for these sectors because current import duty gaps between India and the US are considered too large. The magnitude of Indian and US tariff disparities runs differently between various industrial sectors.
Manufacturers operating within the chemicals and pharmaceuticals industry face an 8.6% tariff differential while plastics manufacturers encounter a 5.6% difference and textile and clothing producers must operate with a 1.4% gap and diamond and gold jewelers operate with a 13.3% difference followed by iron steel processors who operate with a 2.5% difference and machinery manufacturers who operate with a 5.3% gap and electronic equipment manufacturers operate under a 7.2% difference and automakers along with auto component suppliers operate under a 23.1% difference.
A sector’s overall performance would suffer more in direct proportion to the existing tariff differences according to a manufacturer. During early morning on Wednesday (India time) US President Donald Trump plans to make tariff announcements which he calls a ‘Liberation Day ‘ for America.
The analysis from GTRI shows fish, meat and processed seafood would experience the greatest impact from these changes because their exports worth $2.58 billion in 2024 would face increased levels of 27.83 percent.
Our exported products currently face antidumping together with countervailing duties when shipped to the United States. These new rate increases will push our products beyond competitive levels in the market. The American market consumes forty percent of all Indian shrimp exports according to Kolkata-based seafood exporter and MD of Megaa Moda Yogesh Gupta. According to him Indian exporters will experience better market conditions if the US reaches customs agreements with competitor countries Ecuador and Indonesia.
Indian processed food together with sugar items and cocoa commodities risk disruption due to the existing 24.99 percent tariff difference. The international exports of this country reached a value of $1.03 billion during the previous year. The same 5.72 percent differential exists in tariffs for Indian exports of cereals and vegetables and fruits and spices which amounted to $1.91 billion last year.
The Indian dairy industry stands at risk of major losses because dairy exports worth $181.49 million could suffer from a 38.23 percent differential in tariffs according to GTRI Founder Ajay Srivastava. Such differences may increase prices for ghee, butter, and milk powder which will hurt their market penetration in the U.S.
Exhibiting a significant 10.67 percent duty gap while the exports amount to $199.75 million are edible oils. Alcohol wines and spirits collectively amount to $19.2 million exports yet face 122.10 percent tariff differential. Live animals together with their products total $10.3 million exports while facing a 27.75 percent gap. Srivastava noted that tobacco exports worth $94.62 million should not suffer due to existing American tobacco tariffs at 201.15 percent which produce a negative tariff differential (- 168.15 percent).
The American tariffs present the potential to influence the pharmaceutical and jewelry and electronics sectors along with other industrial goods segments. The unpredictability of the Trump administration regarding tariffs causes us to keep our fingers crossed. The implementation of new duties could harm short-term operations although it would not produce sustained negative effects. American consumers will bear the entire financial weight of the situation according to Mumbai-based engineering exporter SK Saraf.
Generic medications and specialty drugs will face increased costs because the pharmaceutical sector stands as India’s largest industrial export valued at USD 12.72 billion for 2024 yet it operates under a 10.90 per cent tariff differential. The export value of diamonds and gold besides silver totaling $11.88 billion could face a 13.32 percent tariff rise that would elevate jewelry costs while decreasing market competitiveness.
The $14.39 billion worth of electrical, telecom and electronics exports operate under a 7.24 percent tariff system. The GTRI predicts a 5.29 percent tariff increase against Indian engineering exports because $7.10 billion worth of machinery boilers turbines along with computers are subject to this change.
GTRI Founder Ajay Srivastava predicts that a 6.05 percent tariff affecting exports worth $5.71 billion chemicals (except pharmaceuticals) will lead to decreased U.S. demand for Indian specialty chemicals while textiles, fabrics, yarn and carpets with exports worth $2.76 billion may encounter a 6.59 percent tariff to increase their market prices.
Also Read: US Tariffs Looming! How Are UK, China, EU And India Tackling Donald Trump’s Moves?
Written By
Priyanka Negi
Apr 02, 2025 14:28
