US Tariff Impact on Indian Exports: 8 Sectors That Could Lose Billions in 2025

The US Tariff Impact on Indian Exports is making headlines and for good reason.

With President Donald Trump’s recent decision to double tariffs on Indian goods to 50%, several key industries could face massive losses in 2025. From diamond polishing to home textiles, exporters are bracing for what could be one of the most disruptive trade moves in years.

US Tariff Impact on Indian Exports 2025 – Sectors at Risk

Why This Tariff Hike is a Game-Changer

On August 6, 2025, the US imposed an additional 25% tariff on Indian imports just days after a similar hike on July 31. The reason? Washington claims India is “directly or indirectly” importing oil from Russia.

The result:

50% total import duty on several Indian goods.
US accounts for 20% of India’s exports and 2% of GDP.
Multiple high-revenue sectors could lose competitiveness overnight.

1. Diamond Polishing — Facing a Shine Crisis

The US Tariff Impact on Indian Exports hits diamond polishers the hardest. The US buys 25% of their total output.

With American demand already shifting toward lab-grown diamonds, a 50% tariff could:

Slash sales volumes.
Shrink already thin margins.
Force layoffs and plant closures.

2. Shrimp Exporters — A Market on the Brink

India is one of the largest shrimp suppliers to the US, earning 48% of revenue from this market.

But with:

Countervailing duties,
Anti-dumping charges, and
Now a 50% total tariff

Indian exporters could lose ground to Ecuador, which enjoys lower tariff rates.

3. Home Textiles — A Looming Slowdown

Indian home textiles depend on the US for 60% of exports, while carpets rely on it for 50%.

These are discretionary products, meaning US buyers can cut spending if prices rise something inevitable after the tariff hike.

4. Ready-Made Garments — Losing the Edge

With 10–15% of revenue coming from the US, garment makers now face stiff competition from Vietnam and China, who can deliver at lower prices.

5. Agrochemicals — Limited Escape Routes

Agrochemical exports to the US form 11–12% of sector revenue. While India could explore Brazil and Latin America, these markets are already dominated by Chinese suppliers.

6. Specialty Chemicals — Small Share, Big Impact

Even though only 5% of sales go to the US, this sector is still recovering from past losses. The tariff hike could delay a full rebound.

7. Capital Goods — Tougher Competition Ahead

US orders account for 15% of revenue here. Ongoing projects might survive, but new contracts could shift to tariff-free countries like Mexico.

8. Solar Panel Manufacturing — Least Affected

Only 10–12% of solar panels are exported to the US, meaning the impact will be mild but competition in clean energy remains fierce.

The Bigger Picture: Inflation, Supply Shifts & Global Ripple Effects

The US Tariff Impact on Indian Exports could:

Push US inflation higher, lowering consumer demand.
Cause a global trade shift, redirecting goods to India’s domestic market.
Create oversupply problems in steel, chemicals, and agrochemicals.

ow India Can Fight Back

Experts suggest:

Bilateral trade deals with non-US markets.
Government safeguard duties to protect exporters.
Exploring emerging markets in Africa, Middle East, and ASEAN.