President Donald Trump has declared that starting August 1, the United States will enforce a 25% tariff on imports from India, after lengthy trade discussions had stalled.
Trump shared this news via his social media platform, Truth Social, on July 30, just days before a series of increased tariffs affecting several countries come into effect on August 1. This latest move adds to the existing 10% baseline tariff, with Trump warning that trading partners who don’t reach individual trade agreements might face increasing baseline tariffs ranging from 15% to 20% soon.
India ranks as the fifth-largest economy worldwide and relies heavily on the U.S., making it their biggest trading partner in 2024, followed closely by China.
In 2024, India’s exports to the U.S. hit a whopping $87 billion, with pharmaceuticals and jewelry leading the way, alongside petrochemicals and textiles. Additionally, Indian services exports, particularly in IT and professional sectors, amounted to $33 billion last year.
The United States stands as India’s third-largest investor, currently grappling with a significant trade deficit of $45.7 billion with this South Asian nation.
Pharmaceutical Exports
When it comes to pharmaceuticals, the U.S. imports nearly a third of its needs from India, particularly cost-effective alternatives to popular drugs. According to Reuters, these sales increased by 16%, reaching about $9 billion last fiscal year.
Some essential medical supplies imported from India include gauze, bandages, cancer medications, as well as pain relievers and fever reducers.
Smartphones
India is increasing its presence in the U.S. smartphone market, though China and Vietnam still supply over half of these devices. Recently, India has surpassed China as the leading exporter of smartphones to the U.S. as companies like Apple have shifted their production focus to New Delhi amidst tariff concerns.
Reports indicate that Indian production of smartphones surged by 240% as the share of shipments from China plummeted from 61% to 25% over the past year, per the research firm Canalys.
Jewelry and Precious Stones
After pharmaceuticals, jewelry and precious materials rank high among India’s exports to American consumers. In fact, the U.S. accounts for over 30% of India’s gems and jewelry trade, which amounts to approximately $10 billion annually, out of an industry worth over $30 billion in India during the 2023/2024 fiscal year.
This trade includes unset diamonds, precious metal jewelry, and any items clad in precious metals like gold or silver.
Home Textiles
Interestingly, India is a leading source of imported home linens for the U.S., comprising 36% of around $6 billion worth of imports, based on an analysis from The New York Times of governmental data.
Notable products in this category include bath towels, kitchen linens, and various bedding items. Apart from fabrics, India is renowned for specific clothing imports, like activewear, stylish shirts, baby apparel, and suits. The changes in tariffs have notably hit clothing and textiles, leading to steep price increases, with apparel projected to be around 37% more expensive shortly, according to the Yale Budget Lab.
Additional Imports
The U.S. also encounters imports from India across various sectors including frozen shrimp, petroleum products like transformer oil, and advanced technologies like solar panels, alongside other electrical equipment and parts.
Contributing: Reuters
Kathryn Palmer is a national trending news reporter for USA TODAY. You can reach her at kapalmer@usatoday.comand follow her on X @KathrynPlmr.
This article originally appeared on USA TODAY: Trump to add 25% tariff to Indian imports. Which everyday goods could be impacted?
