India’s key export sectors such as pharmaceuticals, smartphones, semiconductors, and energy have so far been spared from the impact of the new 50 percent tariff announced by United States President Donald Trump on Wednesday, August 6. These items are currently on the exemption list and account for a significant share of India’s exports to the US.
In financial year 2024-25, India exported USD 10.5 billion worth of drugs and pharmaceuticals and USD 14.6 billion worth of electronics products, mostly smartphones, to the United States. These two categories together made up 29 percent of India’s total exports to the US.
Petroleum exports, which stood at USD 4.09 billion during the same period, also remain unaffected by the higher tariffs under the current exemptions for energy-related products.
Overall, Indian exports to the US totalled USD 86.51 billion in FY25. The new tariff measures announced by the US President are expected to come into effect in the next 21 days. So far, they do not cover the key sectors that have been driving India’s recent export growth to the US.
India’s shipments to the US have shown strong momentum in the first half of 2025, supported by tariff exemptions and an effort by exporters to front-load their consignments ahead of the August tariff hike. Between January and June 2025, the US’s share in India’s merchandise exports rose from around 17 to 18 percent to over 20 percent.
This trend continued even though India’s total exports grew less than 2 percent in the first quarter of FY26 and had contracted by more than 4 percent in the last quarter of FY25. According to data from the Commerce Ministry, exports to the US accounted for roughly 23 percent of India’s total shipments in both the June quarter of FY26 and the first quarter of FY25.
In Q1 FY26, India’s exports to the US reached USD 25.52 billion, marking an increase of nearly 23 percent compared to the same period in the previous year. Total trade between the two countries in the quarter stood at USD 32.41 billion. For the full financial year 2024-25, total bilateral trade crossed USD 86 billion, based on official figures.
Despite the current relief, risks remain. The US President has earlier warned of the possibility of imposing tariffs as high as 200 percent on drugs manufactured overseas. There is also uncertainty over whether the exemptions on smartphones and other electronics will continue in future tariff rounds.
