US President Donald Trump has announced new tariffs of more than 25% on many Indian imports. However, important Indian products such as smartphones, laptops, and medicines are currently excluded from these tariffs. This is good news for Indian exporters because these items are worth more than USD 25 billion and account for a significant portion of India's exports to the US.
Key Highlights
- U.S. exempts nearly $25 billion in critical exports—smartphones, computers, semiconductors—from the 25% tariff.
- Tariff relief targets six strategic sectors—electronics, pharma, copper, lumber, semiconductors, rare minerals spared
In fiscal year 2024-25, India exported approximately USD 14.6 billion in electronic goods and USD 10.5 billion in medicines to the United States. This represents nearly 30% of all Indian exports to America.
Trump stated that these goods are currently exempt, but there is a risk that tariffs on medicines could rise to 200 percent, and electronics may also face tariffs in the future.
Because of the exemption, India's exports to the US have increased since January 2025, particularly smartphones, which currently have no import tax in the US. From January to June 2025, the United States purchased more than 20% of India's total exports, up from the usual 17-18%.
In the April-June quarter of 2025-26, India's exports to the United States accounted for approximately 23% of total Indian exports, similar to the previous quarter. This is despite India's overall exports growing less than 2% in the first quarter of this year and falling by more than 4% in the fourth quarter of 2024-25.
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Trump's tariff move stems in part from his belief that India's trade rules are unfair to the United States, as well as India's close ties with Russia, particularly in defence and energy. Trump has warned that if India continues to buy heavily from Russia, additional penalties may be imposed.
India's role in the expanded BRICS group, which will include five new countries in January 2024, also influenced Trump's decision. Despite these issues, both countries are still discussing a trade agreement. For the time being, the tariffs do not affect energy products such as petroleum, which was worth more than $4 billion last year.
According to government data, India's exports to the United States increased by nearly 23% compared to the previous year, reaching USD 25.5 billion in April-June 2025. Total trade between the two countries was USD 32.4 billion at the time, with trade exceeding USD 86 billion for the fiscal year 2024-25.
