GTRI: Trump’s 25% tariff will apply to all sectors and products in India
New Delhi: According to a study by the Global Trade Research Initiative (GTRI), President Donald Trump’s executive order issued on Thursday slapped a flat 25% tax on all Indian exports, with no exceptions based on product level.
This will remain in effect until the two countries come to a bilateral agreement and the US president issues another executive order.
“Some foreign trading partners listed in Annex I to this order have agreed to, or are about to conclude, meaningful trade and security agreements with the United States,” according to Trump’s executive order dated July 31. Until such agreements are finalized and I issue further orders that memorialize the provisions of those agreements, the goods of those trading partners will continue to be subject to the extra ad valorem tariffs specified in Annex I to this order.”
One of the worst trade measures the United States has implemented against a significant trading partner in recent years, according to the GTRI, is this blanket tariff.
According to the GTRI note, “beginning August 7, 2025, all Indian goods will be subject to a 25% US tariff.” These will be in addition to the normal MFN charges. There are no product- or industry-specific exemptions from the flat 25% ad valorem levy that applies to all commodities in India.
The lack of exemptions for vital industries like electronics, medicines, and crude oil would have a double effect on India’s exports to the United States of pharmaceuticals (USD 9.8 billion), smartphones (USD 10.9 billion), and petroleum products (USD 4.1 billion in FY2025).
The additional tariffs will also have a significant impact on other industries, such as electronics, textiles, and engineering equipment.
According to GTRI’s preliminary predictions, India’s exports of products to the United States might drop by 30% in FY2026, from USD 86.5 billion in FY2025 to USD 60.6 billion.
For a number of important product categories, the United States has granted tariff exclusions to trading partners with whom a trade deal has been concluded.
These include critical minerals; energy products like coal, natural gas, crude oil, refined fuels, and electricity; electronics and semiconductors like smartphones, tablets, solid-state drives, and integrated circuits; and finished pharmaceutical drugs, active pharmaceutical ingredients (APIs), and other necessary drug inputs.
Until October 5, 2025, Indian commodities that are currently in transit will be permitted to pay the previous tariff rates, which were 10% for the majority of products (with the exception of steel and aluminum, which are subject to 50%).
However, further information is required on the extra 25% charge on steel and automobiles, which are subject to 50% and 25% tariffs, respectively.
Electronics, medicines, and petroleum products—all of which have a high import content and a low level of local value addition—are predicted to be the most impacted industries in India.