What Does GTRI’s Report on Indian Exports Say About US Tariffs?

A recent GTRI report predicts a decline in India’s merchandise exports to the US in 2025. This decline is estimated at US$5.76 billion due to the imposition of higher tariffs by the Trump administration. 

Impact on Key Sectors

Several sectors will be significantly affected, as per the Global Trade Research Initiative report. These include gems and jewellery, marine products, electronics, and auto parts. The GTRI analysis used 2024 trade data. It also factored in the competitiveness of other exporters like China, Mexico, and Canada.

In 2024, India shipped US$89.81 billion worth of goods to the US. Now, almost 75% of these goods, valued at US$67.2 billion, will face a 26% duty. 

The US has been India’s largest export destination for years. However, tariffs are now used as a negotiating tool under President Trump’s ‘America First’ policy. Indian policymakers will henceforth face tough choices.

Policy Responses and Exemptions

The Indian government has indicated it will continue bilateral trade negotiations. Some industries may benefit from trade diversion, especially where Chinese goods have been penalised heavily. 

However, steep hikes on industrial and consumer goods will reduce India’s competitiveness. This is because they aim to align tariffs with reciprocal market access. For example, energy products, pharmaceuticals, and solar panels remain exempt under the new tariffs policy introduced by the Trump administration. 

Which Sectors will lose, as per GTRI’s Report? 

Here is a breakup of the sector-specific declines expected to be witnessed by the Indian economy:

Which Sectors will gain, as per GTRI’s Report? 

As per the GTRI report, India’s textiles and garments sector may gain market share in the United States. Moreover, exports of home textiles may increase by 4.2%. Here is a detailed breakup of the different sectors: 

Apart from these, kitchenware and footwear may also report modest gains.

Conclusion

India’s exports to the US had been growing. Exports were US$75.6 billion in FY22 and US$78.3 billion in FY23. Although they dipped to US$77.5 billion in FY24, the long-term trend was positive.

However, new US tariffs pose significant challenges for Indian exporters, potentially leading to a US$5.76 billion decline. Sectors like gems, seafood, and electronics face substantial impacts, while pharmaceuticals see continued growth.

Read more on: How Trump’s 26% Reciprocal Tariffs Could Impact the Indian Stock Market?

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