How will Trump’s 50% tariffs impact the Indian industry? Which sectors will be the most hit?
US President Donald Trump-led administration has notified that 25% additional tariffs on India’s exports to the US will be effective August 27. This takes the total tariffs applicable on India to 50%, among the highest faced by major countries doing trade with the US.The US Department of Homeland Security announced in its draft order that higher duties will be imposed on Indian goods that are “entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 am eastern daylight time on August 27, 2025”.
How will Trump’s 50% tariffs impact the Indian industry? Which sectors will be the most hit? We take a look:According to CRISIL, “The imposition of higher tariffs by the US will significantly impact micro, small and medium enterprises (MSMEs), which account for as much as ~45% of India’s total exports.”“Of the five sectors expected to see meaningful impact, gems and jewellery has the highest exposure to the US at ~$10 billion. While we expect export volumes to contract, the impact may not be fully reflected in revenue terms because of a likely runup in gold prices and sustained domestic demand,” it says.Pushan Sharma, Director, Crisil Intelligence says, “Partial absorption of the increased product prices due to higher tariffs will put pressure on MSMEs, squeeze their already-slim margins and pose a material challenge to their competitiveness. For instance, those into readymade garments are expected to lose ground in the US as the tariff increases to 61%, including 50% additional ad valorem duty, compared with peers in Bangladesh and Vietnam tariffed at 31%.The Tirupur cluster, which accounts for over 30% of India’s RMG exports, will be severely impacted as ~30% of its exports are to the US.”According to a GTRI analysis, following will be the impact of high US tariffs on Indian exports: