US President Donald Trump has announced to impose 25% import tariff on many products coming from India from August 1. This decision is being considered an economic setback for India. This will affect India’s exports, and many goods will also become expensive in America.
Impact on India-US trade
Every year, there is a trade of about $130 billion between India and America. India gets a profit (trade surplus) of about $40 billion in this. But Trump’s tariff decision can spoil this equation.
The tariff will affect both countries –
- India will suffer losses because its exports will become expensive.
- American customers will have to pay more for Indian products.
What things will become expensive in America?
- Jewellery & Gems
- America is India’s biggest customer in this sector.
- Diamonds, gold jewellery, gemstones may now become 25% more expensive.
- This industry is worth $8.5 billion.
- Clothing and ready-made garments
- Every year clothes worth around $2.5 billion are exported from India to America.
- Now their prices may increase by 15-17%.
- Auto Parts
- Auto parts like brakes, engines, wiring sent from India to America will now become expensive.
- This will also impact car repair and manufacturing in America.
- iPhone and Electronics
- iPhones worth $5 billion were shipped from India to the US in April-June 2025.
- Models like the iPhone 17 Pro Max can now cost up to $2,300 (₹1.9 lakhs) in the US.
What losses can India suffer?
- Textile and garment industry
- Thousands of small industries and artisans will be affected due to the decline in textile exports.
- Gems and Jewellery Sector
- The jobs of artisans are in danger.
- Gem and Jewellery Export Promotion Council chairman Kirit Bhansali said that due to rising costs, orders may decline.
- Manufacturing Companies
- There is a possibility of lay-offs (job cuts) in big companies like Tata Motors and Bharat Forge.
- Electronics and solar panel manufacturing companies were already running on low profits, now the situation may worsen further.
What is the government’s response?
Reacting to the US decision, the Indian government said it was analysing the situation and would take all steps to protect national interest.
The Commerce Ministry said in a statement: “Negotiations were going on between India and the US on a trade agreement. We are in favour of a balanced and equitable deal, but there will be no compromise on the interests of farmers, small industries and domestic producers.”
Now what?
- This decision of America can affect the relationship between the two countries.
- India will now have to make a new strategy, so that the impact on exports is reduced.
- The government may have to take steps like subsidies, tax exemptions to provide relief to domestic industries.
- Many customers and companies in America will also be troubled by these increased prices.