India's Agriculture, Machinery, Pharma, Electrical, Chemical Sectors May Get Severely Impacted: Experts

Sectors including agriculture, precious stones, chemicals, pharma, medical devices, electricals, and machinery may get impacted if the US levies reciprocal tariffs on Indian goods, exporters said.

The sectors could face additional customs duties from the Trump administration on the back of the high tariff differential or gap, which is the difference between import duties imposed by the U.S. and India on a product. The greater the tariff differential the higher the tariff.

For chemicals and pharmaceuticals the gap stands at 8.6%, while for plastics and textiles and clothing it’s 5.6% and 1.4% respectively. Tariff gaps for diamonds, gold, and jewellery are 13.3%; 2.5% for iron, steel, and base metals; 5.3% for machinery and computers; 7.2% for electronics.

An exporter said, “The higher the tariff gap, the worse affected a sector could be.”

US President Donald Trump said that the tariff announcements, scheduled for Wednesday (April 2, 2025) , will amount to a ‘Liberation Day’ for the US.

The hardest-hit sectors in the agricultural space are fisheries, meat, and processed seafood. These sectors accounted for exports worth $2.58 billion, facing a tax differential of 27.83%.

“Already our exports have antidumping and countervailing duties in the U.S. The additional hike in tariffs will make us uncompetitive. Out of India’s total shrimp exports, we ship 40% to America,” Kolkata-based seafood exporter and MD of Megaa Moda Yogesh Gupta said.

India’s processed food, sugar, and cocoa exports may also face trouble in future as the tariff gap is 24.99%.

Dairy products, with exports worth $181.49 million, could be “severely” affected by a 38.23% differential, “making ghee, butter, and milk powder costlier and reducing their market share in the US,” GTRI Founder Ajay Srivastava said.

Edible oils ($199.75 million exports and 10.67% duty gap); alcohol, wines, and spirits ($19.2 million exports and 122.10% tariff differential); live animals and animal products ($10.3 million exports and 27.75% gap) can also get affected under tariff imposition.

“We are keeping our fingers crossed because of the unpredictability of the Trump administration at the tariff front. But if it will be imposed, it may affect initially but not in the longer run. The whole burden, though will be on American consumers,” Mumbai-based engineering exporter SK Saraf said.

Electronic and telecom exports face a tariff hike of 7.24%.

“Chemicals (excluding pharmaceuticals), exports worth $5.71 billion, could be affected by a 6.05% tariff, reducing U.S. demand for Indian specialty chemicals,” Mr. Srivastava said adding textiles, fabrics, yarn, and carpets, with $2.76 billion in exports, can face a 6.59% tariff, making Indian textiles pricier.

“Ceramic, glass, and stone products, with $1.71 billion in exports, will face an 8.27% tariff, impacting demand. Footwear, with $457.66 million in exports, faces a high 15.56% tariff differential,” he added.

However, Mr Srivastava said reciprocal tariffs may not be exactly the same as the tariff differential as the U.S. has indicated that they may also factor in non-tariff barriers, VAT (GST), and currency impacts in its reciprocal tariff policy.