Nine major Indian industries face significant setbacks due to imposed US tariffs.
The recent 25% US tariff on Indian goods poses a significant threat to multiple sectors, potentially increasing the cost of Indian exports and making them less competitive compared to other countries with lower tariffs or free trade agreements.
In the pharmaceutical sector, increased costs on exports to the US could reduce demand, impacting Indian pharma companies heavily reliant on the US market. This could also increase costs for US consumers and healthcare providers.
The textile industry is another sector at risk. High tariffs will raise prices of Indian textiles and garments, risking the loss of US market share to competitors like Vietnam, Indonesia, and Ecuador. The Indian textile industry is also pushing for the removal of raw cotton import duties as leverage in trade negotiations.
The renewable energy sector, particularly solar, could also be affected as tariffs could increase costs of solar products and components exported from India, slowing growth in this green energy sector and affecting US renewable energy supply chains.
The automobile sector faces a similar challenge as Indian auto parts and vehicles will become costlier for US importers, potentially shrinking exports and hurting Indian manufacturers reliant on the US market.
Chemicals, like pharmaceuticals, will also face cost pressures, potentially affecting both intermediate and finished chemical products.
Steel and aluminum sectors will be impacted as tariffs will increase prices, negatively affecting exports as US producers may source these products domestically or from other countries.
The electronics manufacturing sector could also face challenges due to higher tariffs on electronic goods and components, which could shift US imports to alternative countries.
The gems and jewellery sector is particularly vulnerable due to high US tariffs (noted at 50% in some reports), risking large losses in exports as buyers shift to cheaper sources.
Agricultural products also face increased costs entering the US market, risking loss in export volumes. India may offer reciprocal tariff reductions on US farm goods during trade talks, such as walnuts and apples, but US tariffs remain a major barrier.
Overall, the tariff hike will raise export costs and complicate trade relations, leading to potential export volume declines, loss of market share in the US, and increased pressure on Indian sectors to find alternative markets or renegotiate trade terms. Sectors with established competition from countries with lower US tariffs are especially vulnerable.
According to recent trade news and official announcements, the tariff hike could potentially reduce chemical exports in FY26, while the imposition of tariffs could result in a 15% effective rate of decline on the cumin spice trade. The gems and jewellery sector exported about US$ 11.6 billion worth of goods to the US in 2024, while steel and finished steel products accounted for approximately USD 6.2 billion in exports. The electronics manufacturing sector, which includes companies like KEI and Polycab, forms five to 15 per cent of revenue for these companies.
This assessment is based on a sector-wise breakdown of recent trade news and official announcements regarding the US 25%-50% tariffs on Indian goods as of August 2025.
- The increased cost of Indian exports due to the tariffs could lead to a shift in consumer preferences towards competing goods from countries with lower tariffs or free trade agreements, impacting the lifestyle and consumer habits based on these goods in the US.
- The escalating tariffs on Indian goods may exert pressure on the economy by potentially reducing exports and increasing costs for US importers, thereby affecting sectors beyond those directly subjected to tariffs, such as the sports industry which relies on certain goods from these affected sectors.
- The weather patterns could be indirectly affected by the tariff hike, as the economic downturn may result in reduced investments in clean energy and green initiatives, ultimately impacting the culture and goals of sustainability advocates in the US.
