In a massive development, US President Donald Trump on Thursday (India Timing) announced a 26% tariff (reciprocal, i.e. tit for tat tariff) on India. In his address, Donald Trump said that India is very strict. Modi is my good friend, but he is not treating us properly. Donald Trump outlined that he is imposing a 'discounted tariff' on India adding, "India imposes up to 52% tariff on America, so America will impose a 26% tariff on India. We will charge about half the tariff that other countries are charging from us. So, the tariffs will not be completely reciprocal. I could have done this, but it would have been difficult for many countries. We did not want to do this."
Apart from India, Trump also announced that a 34% tariff will be imposed on China, 20% on the European Union, 25% on South Korea, 24% on Japan, 46% on Vietnam, and 32% on Taiwan. Not only this but a 10% baseline (minimum) tariff will be imposed on all goods coming to America from other countries. Baseline tariffs will be implemented on April 5 and reciprocal tariffs will be implemented after 12 midnight on April 9. Baseline tariffs are imposed on imports under normal rules of trade, while reciprocal tariffs are imposed in response to tariffs imposed by another country.
Now, the question arises: what products does India export to the US and quite obviously are slated to be costlier for US citizens? Below is all you need to know-
What India exports to the US?
As per reports, in 2024, India's main exports to the US included drug formulations and biologicals (USD 8.1 billion), telecom instruments (USD 6.5 billion), precious and semi-precious stones (USD 5.3 billion), petroleum products (USD 4.1 billion), gold and other precious metal jewellery (USD 3.2 billion), ready-made garments of cotton, including accessories (USD 2.8 billion), and products of iron and steel (USD 2.7 billion).
On the other hand, India imported crude oil (USD 4.5 billion), petroleum products (USD 3.6 billion), coal, coke (USD 3.4 billion), cut and polished diamonds (USD 2.6 billion), electric machinery (USD 1.4 billion), aircraft, spacecraft and parts (USD 1.3 billion), and gold (USD 1.3 billion).
With the US, India has a trade surplus (the difference between imports and exports) of USD 35.32 billion in goods in 2023-24. This was USD 27.7 billion in 2022-23, USD 32.85 billion in 2021-22, USD 22.73 billion in 2020-21, and USD 17.26 billion in 2019-20.
Top 5 products India exports to the US in 2024-25
- Petroleum
Export Value: ₹4.31 lakh crore
Tariff: 0% - 0.75%
- Pharmaceuticals & Medicines
Export Value: ₹1.49 lakh crore
Tariff: 0% - 0.75%
- Telecom Instruments
Export Value: ₹1.46 lakh crore
Tariff: 0%
- Pearls & Precious Stones
Export Value: ₹0.99 lakh crore
Tariff: 0%
- Electronic Machinery & Equipment
Export Value: ₹0.92 lakh crore
Tariff: 0%
What will get costlier for the US citizens?
It is assumed that whatever is exported from India to the US will get costlier. However, there are some items that India exports to the US that have been kept aside from the reciprocal tariffs. As per reports, the White House issued a list of commodities that have been spared, for now. The list spells good news for India as pharmaceutical sector has ‘temporarily’ dodged the levies. At present, India charges a 10 percent tariff on American pharma imports.
On the other hand, the US does not charge any tariffs on pharma imports from India. The list of goods that have been exempted from Trump's tariffs includes semiconductors, lumber articles, copper and gold apart from pharma products. The list also includes energy and certain minerals that are not available in the US.
The White House also said that aluminium and steel articles along with auto and auto components are also exempted as they are already subject to Section 232 duties.
India’s Top Trading Partners in 2023-24
China remains India's largest trading partner with a total trade value of $118.41 billion. However, India faces a massive trade deficit of $85.09 billion due to high imports ($101.75 billion) compared to exports ($16.66 billion).
The United States is the only country among the top 10 with which India enjoys a trade surplus of $36.74 billion. India's exports to the US stood at $77.52 billion, while imports were $40.77 billion.
The UAE ranks third with a trade value of $83.65 billion, but India has a trade deficit of $12.39 billion.
Russia emerges as a key trading partner with total trade at $65.69 billion, but India's trade deficit is significant at $57.17 billion, primarily due to increased oil imports.
Saudi Arabia follows with total trade of $43.37 billion, leading to a deficit of $20.25 billion.
Singapore, Iraq, Indonesia, Hong Kong, and South Korea complete the top 10 list, all showing trade deficits for India, with figures ranging from $6.79 billion (Singapore) to $14.72 billion (South Korea).