The Crossbill News Desk
The Indian finance ministry has estimated that more than half of the country’s merchandise exports to the United States are now subject to Washington’s 25 per cent reciprocal tariff, which took effect on August 7.
In a written reply to the Lok Sabha on Monday (August 11), Minister of State for Finance Pankaj Chaudhary said that around 55 per cent of the total value of India’s merchandise exports to the US will be affected.
“It is estimated that around 55% of total value of India’s merchandise exports to the US will be subject to this reciprocal tariff,” Chaudhary said.
In 2024, India’s exports to the US were valued at $87.3 billion, yielding a trade surplus of $45.8 billion.
“It may be noted that reciprocal tariffs at varying rates have been imposed by the US on imports from all countries. Combination of different factors such as product differentiation, demand, quality, contractual arrangements would determine the impact on India’s exports,” Chaudhary added.
He added that the Department of Commerce is in touch with exporters, industry bodies, and other stakeholders to assess the situation, and stressed that the government would take all necessary measures to protect the interests of farmers, entrepreneurs, exporters, and MSMEs.
The announcement comes against the backdrop of additional trade measures unveiled by US President Donald Trump on July 30 through a post on the social media platform Truth Social.
Trump announced a 25 per cent tariff on Indian goods, along with an extra but initially unspecified “penalty” for imports of energy and defence items from Russia. On August 6, this penalty was clarified as an additional 25 per cent tariff, effective August 27, raising the total tariff on Indian goods to 50 per cent from that date.
Chaudhary’s Lok Sabha reply did not address the potential impact of this extra 25 per cent penalty or specify the proportion of India’s exports that would be subject to it. Certain items from various countries remain exempt from US tariffs until ongoing Section 232 investigations under the Trade Expansion Act of 1962—examining the impact of imports on US national security—are concluded.
Of the nine active investigations, the one into pharmaceuticals and pharmaceutical ingredients is of particular concern to India, as the US accounts for about a third of India’s $30 billion pharma exports in 2024–25.
Economists have warned that the cumulative 50 per cent tariff could significantly hurt India’s economy. Tanvee Gupta Jain, Chief India Economist at UBS, told The Indian Express that up to $30–35 billion worth of exports to the US could be at risk, potentially shaving almost a full percentage point off the country’s GDP growth.
In a written reply to the Lok Sabha on Monday (August 11), Minister of State for Finance Pankaj Chaudhary said that around 55 per cent of the total value of India’s merchandise exports to the US will be affected.
“It is estimated that around 55% of total value of India’s merchandise exports to the US will be subject to this reciprocal tariff,” Chaudhary said.
In 2024, India’s exports to the US were valued at $87.3 billion, yielding a trade surplus of $45.8 billion.
“It may be noted that reciprocal tariffs at varying rates have been imposed by the US on imports from all countries. Combination of different factors such as product differentiation, demand, quality, contractual arrangements would determine the impact on India’s exports,” Chaudhary added.
He added that the Department of Commerce is in touch with exporters, industry bodies, and other stakeholders to assess the situation, and stressed that the government would take all necessary measures to protect the interests of farmers, entrepreneurs, exporters, and MSMEs.
The announcement comes against the backdrop of additional trade measures unveiled by US President Donald Trump on July 30 through a post on the social media platform Truth Social.
Trump announced a 25 per cent tariff on Indian goods, along with an extra but initially unspecified “penalty” for imports of energy and defence items from Russia. On August 6, this penalty was clarified as an additional 25 per cent tariff, effective August 27, raising the total tariff on Indian goods to 50 per cent from that date.
Chaudhary’s Lok Sabha reply did not address the potential impact of this extra 25 per cent penalty or specify the proportion of India’s exports that would be subject to it. Certain items from various countries remain exempt from US tariffs until ongoing Section 232 investigations under the Trade Expansion Act of 1962—examining the impact of imports on US national security—are concluded.
Of the nine active investigations, the one into pharmaceuticals and pharmaceutical ingredients is of particular concern to India, as the US accounts for about a third of India’s $30 billion pharma exports in 2024–25.
Economists have warned that the cumulative 50 per cent tariff could significantly hurt India’s economy. Tanvee Gupta Jain, Chief India Economist at UBS, told The Indian Express that up to $30–35 billion worth of exports to the US could be at risk, potentially shaving almost a full percentage point off the country’s GDP growth.
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