Tariff: Electronics Sector Will Face Significant Cost Increases

Pharmaceuticals: exemption from the new tariffs, was a positive surprise

FinTech BizNews Service

Mumbai, April 3, 2025: On April 2, 2025, the United States imposed a 26% reciprocal tariff on all Indian exports, citing existing high Indian tariffs on U.S. goods and aiming to address trade imbalances.

Accoeding to Satish Chandra Aluri, Lemonn Markets Desk, here’s key sectoral Impacts:

• Electronics: With exports to the U.S. valued at approximately $14 billion, this sector is expected to face significant cost increases, potentially reducing competitiveness. 
• Gems and Jewellery: The $32 billion industry, which exports nearly $10 billion to the U.S., anticipates a sharp decline in exports due to the new tariffs. 
• Auto Parts and Aluminium Products: These sectors will continue to face the previously established 25% tariff, maintaining pressure on their export margins. 
• Pharmaceuticals: With nearly a $9bn exports to US and contributing almost third of total pharma exports, exemption from the new tariffs, was a positive surprise, with shares of major drugmakers jumping in today’s session and Pharma topping the sectoral performance.
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Despite the hit, India's tariff rate is lower than that imposed on other Asian nations, such as China (34%), Vietnam (46%) and Thailand (36%), potentially preserving some competitive advantage for Indian exporters.  As such, market reaction is more measured compared to sharp losses in global markets.

India is also continuing its discussions with the U.S. for a new trade deal and has expressed willingness to reduce tariffs on $23 billion worth of U.S. imports, aiming to mitigate the impact of the tariffs and address trade imbalances.