Trump's Reciprocal Tariffs Hit India from Today, Know Worst-Hit Sectors

US President Donald Trump's so-called reciprocal tariffs came into effect from Wednesday morning on products imported from 86 countries worldwide, including India. Trump has announced a "discounted tariff rate" of 26% on Indian goods earlier this month.

Speaking at the “Make America Wealthy Again” event in the Rose Garden on April 2, Trump called Prime Minister Narendra Modi a "great friend" of him but also criticised India for not "treating the US right." He pointed out that India imposes a 52% tariff on American imports.

Besides India, Trump also announced reciprocal tariffs of 34% on China, 20% on the European Union, 24% on Japan, 25% on South Korea, 10% on the United Kingdom, 36% on Thailand and 31% on Switzerland, among others. Cambodia attracted the highest tariff rate of 49%, followed by Vietnam with 46%.

Beyond country-specific tariffs, Trump maintained a 10% minimum baseline tariff for all imports into the US, affecting over 50 countries.

Meanwhile, China's cumulative tariff rate on its exported goods to the US now stands at a whopping 104% which includes a previously imposed 20% duty, 34% additional tariff and a last-minute 50% increase that Trump signed late Tuesday.

India's Trade Diversification Efforts

Earlier, Outlook Business reported that India held trade and investment-related talks with over 10 countries in the last month. During the period, India and New Zealand resumed their trade talks after almost a decade. It also held the 10th round of talks with the European Union. India also revived its discussions with Uganda after a 23-year gap.

While experts pointed out that the rush in trade deal could be a reaction to global trade shifts, the Indian government insists this momentum reflects India's improved global standing.

Worst-Hit Sectors

Among the worst-hit sectors, it is expected that the Indian gems and jewellery sector would suffer the most under Trump's 26% tariff. Even as the auto ancillary sector was largely untouched by the US on liberation day, it is already subjected to a 25% tariff announced in March. Indian auto and auto component industry derives around 30% of its revenue from exports, with 30% of that coming from the US.

Earlier today, Trump also signalled at imposing tariffs for the pharmaceutical sector. India heavily relies on the US for pharma exports, accounting for a 36.6% share during April–February of FY25, according to Business Standard.