India’s exports to the U.S. face a steep 50% tariff after U.S. President Donald Trump on Wednesday slapped a further 25% responsibility on Indian items over the nation’s oil purchases from Russia. The additional duties — set to come back into impact inside 21 days — can be stacked on high of the 25% tariffs on New Delhi due Thursday stateside, in keeping with the manager order. Analysts are warning that the upper U.S. tariffs danger considerably diminishing the attract of Indian exports to the U.S., in comparison with regional friends. “India’s attractiveness as an rising manufacturing hub can be vastly undermined,” Shilan Shah, deputy chief rising markets economist at Capital Economics, mentioned in a notice. He estimates that the U.S. spending drives round 2% of India’s GDP and the additional 25% tariff is “giant sufficient to have a fabric impression.” India counts the U.S. as its single largest export associate. Its whole items’ exports reached about $434 billion within the 12 months ended March 2025, and practically 20%, or $86.51 billion price of products had been shipped to the U.S., in keeping with the most recent official knowledge. The ensuing drop in exports because of tariffs would imply the economic system grows by nearer to six% this 12 months and subsequent, somewhat than the 7% development forecast previous to Trump’s announcement, Shah mentioned. The potential 50% further tariff on Indian merchandise might put a drag of a complete 0.6 share level on its GDP, in keeping with Goldman Sachs’ estimates. India’s main exports to the U.S. are engineering and digital items, medication and prescription drugs, gems and jewellery, in keeping with the federal government knowledge. With notable variance throughout industries and little readability over Trump’s plans with sector-specific tariffs, listed below are segments that probably stand to lose essentially the most: Engineering items Engineering items, together with merchandise like auto components, energy gear and industrial equipment, have been India’s largest of exports to the U.S. and globally, hitting practically $117 billion within the 12 months ended March. Round 19.16 billion price of those industrial items, or about 16%, had been bought to the U.S. over that interval. Exports of iron, metal, and different merchandise exports accounted for 17.07% of the full engineering exports , whereas non-ferrous metals and merchandise exports contributed 10.52%. Metal exports already face 50% sectoral tariffs, worsening the outlook for the sector as the identical levy now looms giant on its different segments. India’s whole items exports jumped 1.92% in June, partly pushed by the rise in engineering items , which rose 1.35% to $9.5 billion. Gems, jewellery, textiles and apparels The gems and jewellery, and textiles and apparels sectors, are additionally anticipated to be considerably jolted by the sudden hike in U.S. tariffs. The gems and jewellery sector contributes 7% of India’s GDP and employs about 5 million employees, in keeping with a July report by a state-backed business physique. About 33% of India’s gems and jewellery exports went to the U.S. in fiscal 12 months 2025. Rajesh Mehta, government chairman of Indian jewellery maker Rajesh Exports, mentioned in an interview with CNBC Wednesday that larger tariffs can be an “further burden,” whereas calling for presidency assist for the sector . Textiles is among the many most labor-intensive sectors in India, immediately using about 45 million employees throughout the nation. Just like gems and jewellery, round 34% of textile exports went to the U.S. within the final fiscal 12 months. “No doubt, the brand new tariff charge goes to noticeably take a look at the resolve and resilience of India’s textile and attire exporters as we won’t get pleasure from a big responsibility differential benefit vis-à-vis many different nations, besides Bangladesh, with whom we compete for a bigger share of the US market,” the Confederation of Indian textile business mentioned in a press release dated July 30 , earlier than the most recent hike in duties was introduced. Electronics India’s electronics sector relied on the U.S. for 38% of its exports final fiscal 12 months, making it “essentially the most uncovered” to potential dangers of the tariff exemptions being rolled again, in keeping with Alexandra Hermann, lead economist at Oxford Economics. India overtook China to develop into the highest exporter of smartphones bought within the U.S. within the second quarter, after Apple accelerated to maneuver its meeting of extra iPhones to the South Asian nation. In a significant, though momentary, reprieve for firms resembling Apple, Trump in April introduced to exempt smartphones, computer systems and different digital items from tariffs. India’s U.S.-bound exports of digital items have accelerated this 12 months, and its exports in March alone greater than doubled to $2.76 billion from a 12 months earlier. Prescription drugs Whereas the pharmaceutical sector can also be at the moment exempt from tariffs, Trump has threatened duties on pharma exports to the U.S. In an interview to CNBC Trump mentioned he would initially impose a “small tariff” on pharma, after which increase that charge to as excessive as 250% in a number of years. India’s pharma sector has a excessive dependency on U.S. consumers, with its medication and pharma exports to the U.S. reaching over $10.5 billion for the 12 months ended March 2025, accounting for practically 35% of the class’s whole shipments, in keeping with the official knowledge. “[India’s] Chemical compounds general have considerably much less US publicity however this masks the excessive pharmaceutical sector’s US dependency therein,” mentioned Hermann, leaving the pharma sector extremely susceptible to Trump’s potential tariffs. India additionally exported metal and aluminum to the US, however commerce in these items is taxed by means of a separate government order. Total competitiveness “The U.S. might extra simply supply for provides from various import places, however it’s a lot more durable for India to diversify away from the U.S. throughout totally different sectors,” mentioned Michael Wan, senior economist at MUFG Financial institution. India competes towards the likes of Europe in prescription drugs; Vietnam and Mexico in electronics; Cambodia, Sri Lanka, Bangladesh and Vietnam in textiles; and Israel in gems and jewellery, in keeping with Wan. “If these tariff differentials stick, India’s export competitiveness will seemingly be eroded over time,” he mentioned. Among the many export-reliant nations which have clinched preliminary offers with Trump, Vietnam noticed its tariffs lowered to twenty% from 46%. In his newest tariff adjustment, Trump additionally eased tariffs on Thailand to 19% from the “reciprocal” tariff degree of 36%, Bangladesh to twenty% from 35% and Cambodia to 19% from 36%. Round 32% of India’s exports to the U.S. are at the moment exempt from tariffs, in keeping with MUFG’s estimates, together with electronics and pharmaceutical merchandise. — CNBC’s Ayushi Jindal contributed to this story.