India’s economy may face headwinds following Donald Trump’s announcement of a 25% import tariff on Indian goods. Though the tariff was initially scheduled to take effect from August 1, the U.S. has postponed its implementation to August 7. Experts warn this move could slow India’s GDP growth by 0.40% in FY2025–26 and trigger further depreciation of the rupee, which neared a record low of 88 after the announcement.
Economists also express concerns about India’s manufacturing goals being derailed, especially if the U.S. introduces further penalties. Market sentiment has already taken a hit, with both the Sensex and Nifty falling by 0.6%. Meanwhile, analysts project that the rupee may touch 90 against the dollar, particularly amid rising crude prices and foreign capital outflows.
Despite the tariff, India may retain its position as a cost-effective manufacturing hub for Apple. Industry insiders reveal Apple has restructured its India-based exports primarily for the U.S. market, exporting $3.2 billion worth of iPhones via Foxconn between March and May alone.
India’s pharmaceutical sector, which supplies 47% of the U.S. drug market, could be severely affected. A 25% tariff may raise drug prices in the U.S., increase insurance premiums, and strain the supply of essential medicines. India exports $9 billion worth of pharmaceuticals to the U.S., accounting for 28% of its total exports to the country.
