Nine Indian Industries Badly Hit By US Tariffs

The United States has imposed a 50 per cent tariff on India. U.S. President Donald Trump said that India and US have done relatively little business with India’s tariffs being “among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country” as said by Trump. He also expressed his displeasure at the close Indo-Russian ties amidst the ongoing Russia- Ukraine war and said that this was one of the reasons for the imposition of the new tariffs. Trump further went on to call the Indian economy dead.

The tariffs have raised the competition for Indian goods in the U.S. market as many competitors like Pakistan (19 per cent) Bangladesh (20 per cent), Vietnam (20 per cent) and Indonesia(19 per cent) face lower tariffs. 

After the introduction of these tariffs these are the nine sectors that will be hit the most by the U.S. tariffs:

1. Pharmaceuticals Sector

The Pharma sector has been under Trump's crosshair from the beginning. He warned that he will impose 200 per cent tariffs in the pharmaceuticals sector over a period of  time. About 40 per cent of all pharmaceuticals exports from India are to the US making it India's largest overseas pharmaceuticals market, with the exports rising 21 per cent from $8.1 billion in FY24 to $9.8 billion in FY25. Thus, there will be a meaningful impact of the 50 per cent tariff on these companies remaining a key supplier of affordable medicines to the country.

2. Textile Sector

About 28 per cent of India's textile exports are to the US. The major articles of exports to the US are home textiles, garments, and shoes. Companies in this sector generally operate on low margins making the 25per cent tariff a significant blow to the industry. Many large US retailers like The Gap, Walmart, and Costco source their goods from India. These firms would likely renegotiate their contracts, citing the tariffs. This could result in cancellations or sales at lower prices for Indian firms. The end result would be lower profits.

Some of the big Indian textile exporting companies to the US are Welspun India, Raymond, Trident, KPR Mill, and Alok Industries. With companies like Welspun Living, Trident, Himatsingka, and Indo Count that sell bed linen, bath linen, rugs, curtains, etc. It is heavily dependent on its export to the US, with over 40 to 60 per cent of its revenue directly coming from the U.S. Increased tariffs mean these goods become significantly more expensive than what is being sold in the U.S.

3. Renewable Energy (Solar) Sector

Most Indian Photo Voltaic (PV) exports are to the US, which accounted for 97 per cent and 99 per cent of India's PV exports in FY23 and FY24 respectively, according to  Institute for Energy Economics and Financial Analysis. Waaree Energies is India’s largest exporter of Solar modules with over 50 per cent of its order book tied to U.S. buyers. The rise in tariffs may significantly impact U.S. investments in clean energy and the revenue of many Solar Companies

4. Automobile Sector

The US is one of India’s biggest importers in the Automobile sector while India doesn't export cars or bikes directly, its auto ancillaries are one of the key players in the US auto ecosystem

As per media report, India's auto exports to the US were US$ 2.2 billion in FY24 accounting for 29.1 per cent of its total auto parts exports. This number is not huge by itself, but at a company level, exports to the US are significant in many cases.

However, it must be said that the Indian auto sector as a whole is relatively less affected Tata Motors and Sona BLW Precision Forgings are the most exposed.

Tata Motors’ Jaguar Land Rover segment, which offers luxury vehicles, has a 33 per cent wholesale-volume mix while its revenue from the US accounts for 15 per cent of its total revenue.

Sonal BLW specialises in designing and manufacturing highly engineered and high-quality components for electric vehicles. It earns roughly 40-45 per cent of its revenue from the US.

These sectors have low revenue rates so they will be hit badly by the tariffs as the tariff rise will lead to a rise in competition in the industry. 

5. Chemicals Sector

According to industry data, chemicals constitute about 18 per cent of India's total exports to the US, with FY24 exports valued at around USD 5.7 billion. India Ratings and Research estimates the tariff hike could reduce chemical exports in FY26. Indian petrochemical exports to the US, valued at approximately USD 4 billion in 2024, may see reduced demand. 

6. Steel & Aluminum Steel & Aluminum

India exported approximately $6.2 billion worth of steel and finished steel products to the US in FY25, including a wide range of engineered and fabricated steel components and about $0.86 billion of aluminium and its products. Indian steel manufacturers have been gradually increasing market share in the US through high-quality production and competitive pricing.

India exported approximately $6.2 billion worth of steel and finished steel products to the US in FY25, including a wide range of engineered and fabricated steel components and about $0.86 billion of aluminium and its products. Indian steel manufacturers have been gradually increasing market share in the US through high-quality production and competitive pricing.

7. Electronics Manufacturing

Some of the biggest electrical manufacturing companies in India like KEI and Polycab export power cables, engines and industrial machinery. Thermax exports boilers, heaters, solar equipment, etc.

The U.S. forms five to 15 per cent of revenue for these companies. The revised tariffs would make Indian machinery and equipment more expensive, which might lead to lower revenue for these companies.

8. Gems & Jwelleries

The biggest impact on Indian MSMEs due to the US tariffs is likely to be felt by this sector. India's gems and jewellery export promotion council has said that the sector would be severely impacted due to the tariffs as entire supply chains would be disrupted.

India exported about US$ 10 bn worth of gems and jewellery to the US in FY24. The figure in the calendar year 2024 was about US$ 11.6 billion. This is a significant amount considering this industry is nowhere as big or fundamentally strong as others like pharmaceuticals.

The articles of export to the US are diverse including diamond jewellery (natural and lab grown), gold jewellery (plain and studded), and silver jewellery. Tariffs will result in renegotiated contracts with US importers, big retail chains in the luxury and lifestyle space, leading to lower margins and profits and in many cases, outright loss of business.

9. Agriculture

According to Federation of Indian Spice Stakeholders (FISS) the imposition of the tariff will have an effective rate of decline on the  cumin spice trade about 15 per cent on the whole volume for jeera and isabgol despite India being the key sourcing market for both these spices

Currently, India's exports of premium agricultural products are under $1Billion , with scope for expansion beyond $3 billion but with the introduction of the new tariff laws the whole sector will be hit badly.