US' new tariff list: India at 25%, exports to get hit, competitors in lower band
This measure, part of a new Executive Order issued by US President Donald Trump on July 31, places India among the most harshly treated countries in the new American tariff regime, offering no product-level exemptions even for sectors deemed critical like pharmaceuticals, energy, and electronics.
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The Order mentions that tariffs may be reduced once countries do a deal with the US.
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As per the order, countries have been subject to tariffs ranging from 10% to over 41% with differential rates based on geopolitical risk, economic alignment, and trade volume.
Exporters said the new order puts India at disadvantage to majority competitors including Pakistan, Vietnam, Bangladesh, Turkey where the tariffs are 15-20%.
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'India's exports of petroleum products, smartphones, pharmaceuticals, engineering goods, electronics, and textiles will bear the brunt of the tariffs,' said a representative of an
export promotion organisation
.
The penalty threatened by Trump on India for doing business with Russia has not yet been announced.
The US, Wednesday, announced 25% tariffs on India along with undisclosed penalty on trading with Russia.
'The implications of the recent development are being examined by the government. The Ministry of Commerce and Industry is engaged with all stakeholders including exporters and industry for taking feedback of their assessment of the situation,' commerce and industry minister Piyush Goyal said in his statement in Parliament Thursday.
The US was India's largest export destination in FY25 with shipments valued at $86.51 billion. But it accounted for less than a fifth of its total goods exports of $437.42 billion.
As per the Order, unlike many other trading partners, India has been denied all product-level exemptions—even for products and sectors, the US exempted Goods from other countries.
These tariff exempted categories include finished pharmaceutical drugs, APIs
and other key drug inputs; energy products, critical minerals and a wide range of electronics and semiconductors.
The EU has been granted a special concession in which if the existing US most favoured nation (MFN) tariff on an EU product is below 15%, the total tariff will be increased to 15%. However, if the MFN tariff is already 15% or higher, then no additional duty will be charged.
A 10% tariff applies to a few countries—Brazil, the UK, and the Falkland Islands.
The 15% tariff, which is the most common, covers 38 countries. Countries facing higher tariffs (25-30%) include India, Brunei, Kazakhstan, Moldova, and Tunisia.
Iraq and Serbia at 35%, Switzerland at 39% (unusually high for a developed nation), Laos and Myanmar at 40%, and Syria at 41%, the highest.
The US Customs Border Protection authority will realise a guidance clarifying on how this measure will be applied.
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