The US will impose a flat 25% tariff on goods from India without any product level exemptions for sectors like pharma and electronics, which could threaten as much as $25 billion of India’s exports, said a new analysis by think tank Global Trade Research Initiative (GTRI).
Noting that this blanket tariff is “one of the toughest trade actions the US has taken against a key trading partner in recent years”, GTRI Founder Ajay Srivastava said. “What sets this action apart is that, unlike many other trading partners, India has been denied all product-level exemptions—even for products and sectors, the US exempted goods from other countries.”
These tariff-exempted categories included finished pharmaceutical drugs, active pharmaceutical ingredients (APIs), and other key drug inputs; energy products such as crude oil, refined fuels, natural gas, coal, and electricity; critical minerals; and a wide range of electronics and semiconductors, including computers, tablets, smartphones, solid-state drives, flat panel displays, and integrated circuits.
“These exclusions do not apply to India. Instead, India is subject to a flat 25% ad valorem duty across all goods, with no exceptions by product or sector,” said the report.
As per a new Executive Order issued by US President Donald Trump on July 31, the US has imposed a blanket 25% tariff on all Indian-origin goods, effective August 7, 2025. These will be over and above the standard MFN tariffs.
While Indian goods will attract tariffs at the rate of 25% starting October 7, goods in transit can continue paying tariffs at earlier rates of 10% on most products (except like steel and aluminum where tariffs are 50% and tariff exempt products like smartphones) up to October 5, 2025, the report said.
Tariff exemption to other countries and not India will doubly hit India’s exports of petroleum products ($4.1 billion in FY25), smartphones ($10.9 billion), pharmaceuticals ($9.8 billion) to the US, it highlighted, adding that all other sectors engineering goods, electronics, and textiles will also have to bear the brunt of the tariffs.
Quick estimates suggest that India’s goods exports in FY26 may come down by 30% to $60.6 billion in FY26 from $86.5 billion in FY25. Most affected categories will be petroleum products, Pharmaceuticals and electronics each of these have high import content and low domestic value add, it said.
