Archive · 2 Aug 2025
US Tariffs Impacting $12.5 Billion in Indian Engineering Exports
The US is now taxing some engineering goods from India at a rate of 25%.
This will impact $12.5 billion worth of exports.
These goods weren't taxed before.
Although this worries exporters, the situation is only slightly worse than what competitors face.
A trade agreement could lower these taxes.
But, a trade deal may face obstacles.
These obstacles include mutual mistrust, unpredictable negotiation, disagreements over agricultural and dairy access, strategic autonomy, and the impact of tariffs on Russian crude oil imports.
US imposed 25% reciprocal tariffs on certain Indian engineering goods.
Tariffs are expected to affect $12.5 billion of engineering goods exports.
The tariffs apply to goods previously outside the scope of sectoral tariffs.
Exporters face a 6% tariff differential compared to most competitors.
A bilateral trade agreement could reduce these tariffs.
- Who
- Indian exporters and the US government.
- What
- The US imposed 25% reciprocal tariffs on certain Indian engineering goods.
- When
- Effective August 7, 2025.
- Where
- United States and India.
- Why
- The tariffs are a result of trade policy.
US Tariffs and India-US Trade Deal Roadblocks
US Trade Policy
Impact on Trade
US Tariffs and India-US Trade Deal Roadblocks
US tariffs will hit Indian exports of about $33 billion, and reciprocal taxes on US imports may become a roadblock in India-US trade deal.
US Trade Policy
The US may not comply with the Indian demands on the Russian crude oil imports, which can increase the cost of crude and impact currency and inflation.
Taxes
US Tariffs and India-US Trade Deal Roadblocks
India may reimpose digital tax on US companies after removing it from 1st April 2025.
US Trade Policy
The US government demand for Access to the Indian dairy and agriculture segment.
- Tariff Rate
- 25%
- Affected Exports
- $12.5 billion
- Effective Date
- August 7
- Tariff Differential (Competitors)
- 6%
- India's Engineering Exports to US
- $20 billion annually
- Trade Deficit (2024)
- $27.4 billion
Sources
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