Even as US President Donald Trump announced steep new tariffs of over 25 percent on imports from India, several key Indian exports such as smartphones, laptops, and pharmaceutical drugs have been temporarily spared. This selective exemption brings some relief to Indian exporters, as these products constitute a substantial portion of India’s trade with the US—amounting to over $25 billion. In the financial year 2024–25 alone, India exported $14.6 billion worth of electronic goods and $10.5 billion in pharmaceuticals to the US, accounting for nearly 30 percent of India’s total exports to the country.
Trump clarified that these items are currently excluded from the new tariff list, although he did not rule out future duties—particularly warning of possible levies as high as 200 percent on foreign-manufactured medicines. There also remains uncertainty over whether electronics like smartphones and laptops will continue to enjoy their current exemptions. Despite this ambiguity, the temporary relief has helped maintain strong export numbers from India to the US. Since January 2025, the US has increased its imports from India, especially smartphones, which currently benefit from zero import duty in the American market.
From January to June 2025, the US accounted for over 20 percent of India’s total merchandise exports, a jump from the earlier average of 17 to 18 percent. During the April–June quarter of FY26, India’s exports to the US formed about 23 percent of all outbound shipments, maintaining the same level seen in the final quarter of the previous fiscal year. This surge in trade has occurred even though India’s overall exports grew by less than 2 percent in the first quarter of FY26 and actually contracted by over 4 percent in the last quarter of FY25.
The latest tariff hike is seen as part of Trump's ongoing efforts to counter what he perceives as unfair trade practices by India, including high duties on American products. Additionally, the US has raised concerns about India’s growing closeness with Russia, particularly in defence and energy cooperation. Trump has hinted at more penalties if India continues its strong commercial ties with Moscow. He also cited India’s active role in the expanded BRICS alliance—which admitted five new members in January 2024—as a contributing factor behind his decision.
Despite these tensions, diplomatic efforts continue, with both countries engaged in discussions toward a bilateral trade deal. Notably, energy products like petroleum—worth over $4 billion last year—have also been excluded from the latest tariff list. According to government data, India’s exports to the US grew nearly 23 percent year-on-year to reach $25.5 billion in the April–June 2025 period. Total bilateral trade during the same time stood at $32.4 billion, while the trade volume for the full FY25 was valued at more than $86 billion.
