With US President Donald Trump’s April 2 deadline for imposing reciprocal tariffs approaching, businesses and policymakers remain uncertain about how they will be applied. While the tariffs aim to address America’s trade deficit, Washington is simultaneously negotiating a new trade deal with India, adding further complexity to the situation.

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The impact on Indian businesses will depend on whether the tariffs are imposed at the product, sector, or country level. The US has been India’s largest trading partner from 2021-22 to 2023-24, accounting for 18% of India’s total exports, 6.22% of imports, and 10.73% of bilateral trade.

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Key sectors facing higher tariffs

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India exports products from 30 different sectors to the US, including six in agriculture and 24 in industry. If sector-wide tariffs are imposed, the following goods are expected to be affected:

Alcohol, Wines, and Spirits – The highest tariff hike of 122.10% will be applied, though exports in this category total only $19.2 million.

Dairy Products – Exports worth $181.49 million will be hit by a 38.23% tariff, making Indian ghee, butter, and milk powder more expensive and reducing market share.

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Fish, Meat, and Processed Seafood – A 27.83% tariff hike will impact $2.58 billion in exports, with shrimp exports suffering the most.

Live Animals and Animal Products – A 27.75% tariff will affect exports valued at $10.31 million.

Processed Food, Sugar, and Cocoa – With $1.03 billion in exports, these products will face a 24.99% tariff, making Indian snacks and confectionery costlier in the US.

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Footwear – This sector will see a 15.56% tariff increase.

Diamonds, Gold, and Silver – Exports worth $11.88 billion will face a 13.32% tariff hike, potentially making Indian jewellery less competitive.

Pharmaceuticals – A 10.90% tariff differential will push up prices for generic medicines and speciality drugs.

Edible Oils – Coconut and mustard oil will become more expensive with a 10.67% tariff.

Sectors unaffected

Certain industries, including ores, minerals, petroleum, and garments, will not see any new tariffs under the proposed plan.

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(With inputs from agencies)