Even as US President Donald Trump announced fresh tariffs exceeding 25% on Indian imports, key sectors including smartphones, laptops, and pharmaceutical products have been kept out of the list for now. The move offers partial relief to Indian exporters, especially in high-value sectors that account for a significant portion of India’s total exports to the United States.

Smartphones and medicines alone contributed over $25 billion in exports during FY25, with India shipping $14.6 billion worth of electronic goods and $10.5 billion worth of pharmaceuticals to the US. Together, they represent nearly 30% of India’s overall export volume to the American market.

According to Trump, these categories are temporarily exempt from the new import duties, though the threat of further action remains. He has hinted at potential levies as high as 200% on foreign-made medicines and indicated that electronics may not stay exempt indefinitely. The exclusion of key categories has helped maintain strong export momentum. From January to June 2025, the US accounted for over 20% of India’s total merchandise exports, up from the earlier average of 17–18%. During the April–June quarter of FY26, India’s exports to the US made up 23% of its total outbound trade, matching the previous quarter’s figures.

This uptick comes despite an overall slowdown in outbound shipments. While exports to the US rose nearly 23% year-on-year to $25.5 billion in April–June 2025, India’s total exports grew by less than 2% in Q1 FY26 and had contracted by over 4% in the final quarter of FY25.

Trump’s tariff move follows his repeated criticism of India’s trade policies, particularly what he views as high import duties on American goods. Geopolitical factors may also be influencing the decision. Washington has expressed concern over New Delhi’s continued energy and defence ties with Russia, along with its growing role in the expanded BRICS grouping, which welcomed five new countries in January 2024.

Despite rising trade tensions, both sides are still engaged in negotiations for a comprehensive bilateral trade agreement. Energy exports, including petroleum, worth more than $4 billion last year, have also been spared from the latest duties. Total trade between the two countries stood at $32.4 billion in April–June 2025. For the entire FY25, bilateral trade was valued at over $86 billion.