What US imports from India? How 25% tariffs impact trade?
What's the story
US President Donald Trump has announced a 25% tariff on Indian imports, effective August 1. The decision comes amid tough trade deal negotiations and criticisms over India's high tariffs and non-monetary trade barriers. The US is also unhappy with India's close ties with Russia in military and energy partnerships. But what does the US actually import from India, and how do the tariffs impact trade? Let's take a look.
Trade details
US imports from India
The US imports a wide range of goods from India, including affordable generic drugs and other pharmaceutical products. India is also a leading supplier of gems and precious stones such as diamonds. Electrical and electronic equipment, textiles and clothing, especially cotton products, are other major exports. In 2024 alone, the US imported a total of $91.2 billion worth of goods and services from India. The country's contribution to overall US goods imports was 18%.
Cultural exports
Basmati rice and handicrafts
India is the world's largest producer of basmati rice, with the US being one of the major buyers. Traditional Indian handicrafts, handwoven carpets, and decorative items are also popular in the American market. Leather goods such as shoes, bags, and belts are other major exports from India to the US.
Trade expansion
Take a look at the figures
In 2024, the US imported $14.40 billion worth of electrical and electronic equipment from India, making it the top category in trade. India also supplied $12.73 billion in pharmaceutical products; $11.88 billion in pearls, precious stones, metals, and coins; and $7.10 billion in machinery, nuclear reactors, and boilers. Organic chemicals accounted for $3.63 billion, while mineral fuels, oils, and distillation products were worth $3.23 billion. Other imports included textile articles, clothing, iron and steel, and miscellaneous items totaling $11.25 billion.
Tariff implications
Impact of tariff on Indian exports to US
The proposed 25% tariff could have a major impact on key Indian export sectors such as pharmaceuticals, auto parts, and electronics. These sectors may face higher tariffs than other trading partners. The increased cost of Indian goods due to the tariff could reduce their competitiveness in the US market, potentially leading to lower demand and market share.
Scenario
Possibility of a trade deal
A trade deal between India and the US remains on the table, with an American delegation scheduled to visit India on August 25 for the sixth round of talks on the long-awaited Bilateral Trade Agreement (BTA). Both Prime Minister Narendra Modi and President Trump reaffirmed their commitment during a meeting earlier this year.