Released April 11, 2025 | NEW DELHI
en
Researched by Industrial Info Resources (Sugar Land, Texas)--In a constantly evolving landscape of trade tensions, U.S. President Donald Trump rolled out a series of tariffs on April 2. In an effort to combat trade imbalances, currency manipulations and protect domestic production, the U.S. has announced a set of import duties on many of its trade partners. This includes a 10% baseline tariff on all imports as well as higher rates for nations deemed to engage in unjust trade with the U.S. Amongst countries facing these inflated duties, India is projected to encounter a reciprocal tariff rate of 26%. These charges were implemented from April 5 (10%) in the country, with the rest becoming effective from April 10th (an additional 16%). However, as per recent news, President Trump has announced a 90-day halt on both reciprocal and 10% tariffs for more than 75 nations.
Over the years, India has been a key exporter to the U.S., with goods like pharmaceuticals, gems and jewelry, electronics, machinery and automobiles making up a significant share of the cross-border trade. As per India Brand Equity Foundation (IBEF), India-U.S. bilateral trade accounted for US$118.2 billion in fiscal 2024, with India having a trade surplus of US$36.8 billion. India's exports to the U.S. also stood at US$77.5 billion, marking an upward trajectory. With tariffs coming into play and a new financial year kicking off, Indian exporters are likely to experience challenges owing to price escalations in the U.S. markets.
While India continues to analyze the entire impact of these tariffs, the commerce industry has termed the effect as a mixed bag and not a setback. Key export sectors such as pharmaceuticals, semiconductors, solar panels and IT services remain exempt from higher taxes. India continues to hold discussions with Washington to finalize a bilateral trade agreement that would help in fostering equitable trade relations while easing tariff burdens. India has also maintained a moderate stance, withholding counter-tariffs or official statements considering the U.S.' role in India's trade landscape. Furthermore, the Indian government is relying on a crucial section of the executive order signed by the U.S. president that offers relief to "trading partners taking significant steps to remedy non reciprocal trade agreements."
Industry experts suggest that India might land up with a trade arrangement with the U.S. as early as fall (September-October) this year. The country is expected to benefit from a first-mover advantage in securing a trade deal, unlike nations like China and Vietnam, which face higher tariffs. However, the final trade agreement between both countries remains to be seen.
Industrial Info is tracking more than 15,500 active capital projects in India worth more than US$1 trillion. The majority of the spending is based in Gujarat (US$224 billion), Maharashtra (US$203 billion) and Rajasthan (US$187 billion). Other states with significant investments include Andhra Pradesh, Odisha, Tamil Nadu and Karnataka.
With a total spend pipeline of more than US$1 trillion, the Power Industry is the biggest driver of investments and holds a market share of 65%. IIR is also tracking an investment of more than US$152 billion in the Industrial Manufacturing Industry. Although passenger vehicle exports between India and the U.S. are modest, auto component manufacturers that are reliant on U.S. markets may face a revenue reduction of 12.1%. Alongside, electrical products and machinery are also expected to see setbacks.
The Metals & Minerals Industry also attracts a significant investment of about US$120 billion. Diamond and gold products are expected to be down by 15.3% after the latest tariff hike. While steel and aluminum have been spared from recent increases beyond the existing 25% duties, concerns about limited access to U.S. markets and dumping from other nations persist. The Food & Beverage Industry is expected to face major losses, with seafood exports likely to suffer a 20.2% decline. Indian products are set to face tough competition from Canada, as it benefits from a tax waiver under the United States-Mexico-Canada (USMCA) trade pact. According to agricultural economist Ashok Gulati, India is unlikely to lose much in farm exports. India is expected to withstand tariffs as competing nations face higher duties in comparison to India. IIR is tracking an overall investment of more than US$11 billion across India's Food & Beverage Industry.
About 75% of this expenditure is geared at grassroot projects, while 16% is aimed at unit additions. With 77% of the investment in the planning phase, 13% under construction and 10% in the engineering stages, these projects are anticipated to reach fruition by March 2036.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
Over the years, India has been a key exporter to the U.S., with goods like pharmaceuticals, gems and jewelry, electronics, machinery and automobiles making up a significant share of the cross-border trade. As per India Brand Equity Foundation (IBEF), India-U.S. bilateral trade accounted for US$118.2 billion in fiscal 2024, with India having a trade surplus of US$36.8 billion. India's exports to the U.S. also stood at US$77.5 billion, marking an upward trajectory. With tariffs coming into play and a new financial year kicking off, Indian exporters are likely to experience challenges owing to price escalations in the U.S. markets.
While India continues to analyze the entire impact of these tariffs, the commerce industry has termed the effect as a mixed bag and not a setback. Key export sectors such as pharmaceuticals, semiconductors, solar panels and IT services remain exempt from higher taxes. India continues to hold discussions with Washington to finalize a bilateral trade agreement that would help in fostering equitable trade relations while easing tariff burdens. India has also maintained a moderate stance, withholding counter-tariffs or official statements considering the U.S.' role in India's trade landscape. Furthermore, the Indian government is relying on a crucial section of the executive order signed by the U.S. president that offers relief to "trading partners taking significant steps to remedy non reciprocal trade agreements."
Industry experts suggest that India might land up with a trade arrangement with the U.S. as early as fall (September-October) this year. The country is expected to benefit from a first-mover advantage in securing a trade deal, unlike nations like China and Vietnam, which face higher tariffs. However, the final trade agreement between both countries remains to be seen.
Industrial Info is tracking more than 15,500 active capital projects in India worth more than US$1 trillion. The majority of the spending is based in Gujarat (US$224 billion), Maharashtra (US$203 billion) and Rajasthan (US$187 billion). Other states with significant investments include Andhra Pradesh, Odisha, Tamil Nadu and Karnataka.
With a total spend pipeline of more than US$1 trillion, the Power Industry is the biggest driver of investments and holds a market share of 65%. IIR is also tracking an investment of more than US$152 billion in the Industrial Manufacturing Industry. Although passenger vehicle exports between India and the U.S. are modest, auto component manufacturers that are reliant on U.S. markets may face a revenue reduction of 12.1%. Alongside, electrical products and machinery are also expected to see setbacks.
The Metals & Minerals Industry also attracts a significant investment of about US$120 billion. Diamond and gold products are expected to be down by 15.3% after the latest tariff hike. While steel and aluminum have been spared from recent increases beyond the existing 25% duties, concerns about limited access to U.S. markets and dumping from other nations persist. The Food & Beverage Industry is expected to face major losses, with seafood exports likely to suffer a 20.2% decline. Indian products are set to face tough competition from Canada, as it benefits from a tax waiver under the United States-Mexico-Canada (USMCA) trade pact. According to agricultural economist Ashok Gulati, India is unlikely to lose much in farm exports. India is expected to withstand tariffs as competing nations face higher duties in comparison to India. IIR is tracking an overall investment of more than US$11 billion across India's Food & Beverage Industry.
About 75% of this expenditure is geared at grassroot projects, while 16% is aimed at unit additions. With 77% of the investment in the planning phase, 13% under construction and 10% in the engineering stages, these projects are anticipated to reach fruition by March 2036.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
