US President Donald Trump imposed a 27% tariff on India’s exports to the United States. India will face this tariff from next week. However, this is relatively lower compared to the duties imposed by the Trump administration on some Asian nations such as Thailand, Vietnam, Sri Lanka and Bangladesh.
Moreover, the tariff imposed on India is about half of what exports from China will suffer – a 34% reciprocal tariff in addition to the 20% duty imposed earlier. Trump administration has imposed 46% tariffs on Vietnam and 37% on Thailand and Bangladesh.
Experts believe that India’s exports will be less adversely affected compared to exports from some of these countries. However, experts expect that sectors such as electronics and smartphones, gems and jewellery, fisheries, and textiles and apparel to be most hurt by the 27% tariff. Additionally, India’s software industry may also face indirect impact if the anticipated economic slowdown in the US becomes a reality.
US Tariffs Impact: Apple iPhones Caught In The Crossfire
Since Apple has begun assembling iPhones in a local facility in India, India’s exports of mobile phones have grown rapidly to about $6 billion. However, the tariffs may negatively impact its progress. Although some iPhone components are sourced locally, most parts are imported from China, South Korea, and Taiwan. Notably, these are the countries hit with high tariffs by the US. Likewise, a slowdown in exports of India-assembled iPhones could negatively impact local component suppliers.
Furthermore, electrical products and mobile phones accounted for 14% of India’s exports to the US in 2023-24. Now with higher tariffs imposed on Vietnam and Thailand, India has the opportunity to emerge as a preferred destination for new electronics manufacturing facilities.
