Even though US President Donald Trump’s 25 per cent tariff announcement on Indian imports has raised an alarm, it stands to impact less than half of the exports worth 86 billion US Dollars, that India sends to America. Pharmaceuticals are among the categories reportedly exempted from bearing the brunt of Donald Trump’s 25 per cent tariffs(AFP)

According to news agency PTI, much of India’s significant export products like pharmaceutical, critical minerals and electronic devices remain exempted from the tariffs.

“More than half of India’s exports to the US will not be impacted by the duty. Due to the Section 232 exemption of the US, only exports worth about USD 48 billion would be impacted with these tariffs,” PTI quoted its sources as saying.

The exempted items would reportedly include medicines, energy products like crude oil, fuels, natural gas, coal, and electricity, and a range of electronics and semiconductors such as computers, tablets, smartphones, and display screens.

Besides, even though Trump announced a penalty for India apart from the 25 per cent tariffs, citing India’s purchase of oil and military equipment from Russia, there are no specifics to this end yet.

Exports to be impacted by 25% tariffs

While more than half of India’s exports to the US would reportedly remain unaffected by the tariffs, there still are some sectors that stand to bear the brunt.

These include textiles (10.3 billion), gems and jewellery (12 billion), shrimp (USD 2.24 billion), leather and footwear (USD 1.18 billion), animal products (USD 2 billion), chemicals (2.34 billion), and electrical and mechanical machinery (about USD 9 billion).

Among these, shrimp exporters, which account for nearly 48% of their total exports, now face a challenge in the US market, said Crisil Ratings Senior Director Rahul Guha.

These sectors have urged the government to intervene in the matter.

What next for India-US trade ties?

Donald Trump signed executive orders on Friday, imposing reciprocal tariffs between 10% and 41% on different trading partners. As announced a 25 per cent tariff was announced on imports from India.

However, this may not be the end of the road as negotiations on trade between India and the US are still underway, and India is reportedly not willing to compromise on agricultural, daily and genetically modified (GM) products.

Both sides are looking to reach a bilateral trade agreement (BTA), and want to conclude the first phase of the pact before the year ends.

With PTI inputs