Statsguru: Donald Trump's reciprocal tariffs present a mixed bag for India

US President Donald Trump has imposed a “concessional” 26 per cent general tariff on imports from India. Many say this will give New Delhi a distinct advantage over competitors in certain sectors. 

India is not a major player in the US market – 10th-biggest with a share of just 2.68 per cent in the US’ total imports in 2024 (Chart 1).  

Electrical machinery & equipment is India’s top category of exports to the US, followed by gems & jewellery, precious & semi-precious stones, including pearls, and pharmaceutical products (Chart 2).  

After tariffs, India may get an edge over China, Vietnam and Bangladesh in textiles. But China and Vietnam were way ahead of India in the US’ textile imports in 2024 (Chart 3).  

In the automobile component sector, India's position is even weaker. Mexico takes the lion’s share of the US’ imports of auto parts, followed by Canada and China. While India struggles in this space, it might now be hurt further, as the first two countries have been exempted in the recent tariff hikes (Chart 4).  

Pharmaceuticals remain India’s strength in the US. For now, these will continue to benefit from a steady demand, as no new trade barriers have been imposed on them (Chart 5).  

Even as India runs a trade deficit with the rest of the world, it has consistently managed a surplus with the US (Chart 6).