According to a report by the Global Trade Research Initiative (GTRI), on Thursday, the executive order signed by President Donald Trump has imposed a flat 25 percent tariff on all goods from India, with no product-level discount.
This will apply until a bilateral agreement is signed between the two nations and another executive order is issued by the President of the United States.
On 31 July, Trump’s executive order wrote, “Some foreign trading partners, identified in the Annex I for this order, have agreed to the closing, meaningful trade and security agreements with the United States.
GTRI said that this blanket tariff is one of the most difficult trading works done against a major trading partner in recent years.
The GTRI note states that “all goods from India will face 25 percent of the US tariffs starting from August 7, 2025. These standard will be above and above the MFN tariff. India is subject to a flat 25 percent advertisement in all goods, which has no exception by product or region”.
The absence of exemption for important areas such as pharmaceuticals, crude oil, and electronics will be affected for Indian exports of petroleum products (USD 10.9 billion), and pharmaceuticals (USD 9.8 billion) to the US.
Other areas such as engineering goods, electronics and textiles will also have to face high tariff flaws.
Rapid estimates of GTRI suggests that India’s goods export FY2026 may decline by 30 percent, which ranges from USD 86.5 billion to USD 60.6 billion in FY 2015.
The US has offered tariff exemption to business partners, with which business agreement is made for many major product categories.
These include prepared pharmaceutical drugs, active pharmaceutical materials (APIs), and other essential drug inputs; Energy products such as crude oil, refined fuel, natural gas, coal and electricity; Important minerals; And electronics and semiconductors including smartphones, tablets, solid-state drives and integrated circuits.
Meanwhile, India’s goods which are already in transit will be allowed to pay tariff rates first, 10 percent on most products (except items such as steel and aluminum who face 50 percent), till October 5, 2025.
However, there is a need for more clarity on steel and auto additional 25 percent of duty, on which 50 percent and 25 percent related tariffs are imposed.
For India, the most affected categories are expected to have petroleum products, pharmaceuticals and electronics, in addition to high import materials and low domestic values. (AI)
