25% import duty by Trump could lead to 30% decline in India's exports to America this fiscal: GTRI

The Global Trade Research Initiative (GTRI) has said that the additional 25 per cent import duty announced by US President Donald Trump on Indian goods could lead to a 30 per cent decline at $60.6 billion in India's exports to America this fiscal (FY26) from $86.5 billion in FY25. To help exports, it suggested the government to revive the interest equalisation scheme, create a helpdesk, use trade agreements strategically, and onboard new exporters. India now faces a 25 per cent country-specific tariff and an extra unspecified penalty on its exports to the United States -- one of the highest among Asian exporters, second only to China at 30 per cent. In contrast, competitors such as Vietnam (20 per cent), Bangladesh (18 per cent), Indonesia, Malaysia, and the Philippines (19 per cent), and Japan and South Korea (15 per cent) enjoy lower rates. This puts Indian exports at a clear disadvantage across most sectors, barring a few exemptions.

The new US tariff regime excludes pharmaceuticals, energy products, critical minerals, and semiconductors. GTRI Founder Ajay Srivastava said India's garment exports are among the worst hit. He said knitted and woven garments -- each worth $2.7 billion -- now face steep US tariffs of 38.9 per cent and 35.3 per cent, much higher than the rates for Vietnam, Bangladesh, and Cambodia, and added that made-up textiles like towels and bedsheets, which earn India $3 billion in exports (with nearly half going to the US), now face a 34 per cent duty. This gives a clear advantage to competitors like Pakistan and Vietnam.

He also said that India's $2 billion shrimp exports, which make up 32 per cent of global supply, will now face a 25 per cent US tariff. He added this wipes out their price edge over rivals like Canada and Chile, who benefit from free trade deals with the US. Jewellery exports worth $10 billion -- 40 per cent of India's global jewellery trade -- now face a 27.1 per cent duty. With the sector adding just 3-4 per cent in value, margins are thin. Mechanical gold jewellery exports to the US ($3.6 billion) are likely to be hit the hardest. India's $4.7 billion in metal exports -- mainly steel, aluminium, and copper -- will also suffer, as the higher cost is expected to curb demand from US infrastructure and energy buyers.

India's engineering exports -- $6.7 billion in machinery and $2.6 billion in auto parts -- now face over 26 per cent US tariffs, making them costlier than similar goods from Mexico (zero tariff) and Japan (15 per cent). He said Petroleum exports worth $4.1 billion are still tariff-free, but India's use of Russian crude could invite penalties, and added pharmaceuticals ($9.8 billion) and smartphones ($10.6 billion) are currently exempt, but not safe -- Trump has warned of tariffs on Indian medicines and tighter rules on electronics with Chinese parts. He added that exporting more to other countries to make up for losses in the US market won't be easy. He said Trump's 27.1 per cent tariff on India's $10 billion diamond and jewellery exports, 40 per cent of its global trade in the sector -- delivers a ‘heavy blow’ to the sector. With value addition barely 3-4 per cent, margins are wafer-thin, and such duties can turn exports instantly unviable.