From Medicines To Gems: How Trump's India Tariff Will Impact Americans
US President Donald Trump on Wednesday announced a 25% tariff on Indian imports starting August 1, a move that is expected to raise prices for American consumers across key sectors such as smartphones, textiles, auto parts and jewellery. The announcement, made on Truth Social, cites India's 'high tariffs" and 'non-monetary trade barriers," though analysts say the move could backfire for the US economy.
'India is our friend," Trump wrote, 'but we have done relatively little business with them because their tariffs are far too high… and they have the most strenuous and obnoxious non‑monetary trade barriers of any country."
According to a Reuters report, India is a major supplier to the US in segments like smartphones, automotive components, cut and polished diamonds, ready-made garments, and pharmaceuticals. American companies and consumers will now likely face steeper costs across these essential categories.
A recent analysis by Counterpoint Research highlights that India has become a global manufacturing hub for smartphones. Many of the mid-range Android phones and even components for US brands like Apple are assembled in India.
A 25% tariff on such imports will inevitably increase prices for US consumers, who are already battling inflation. Yale's Budget Lab and the Associated Press forecasts apparel prices could rise 17% under the full tariff regime, even after substitution effects.
India exported $2.2 billion worth of auto parts to the US in 2023, according to the Auto Component Manufacturers Association of India (ACMA). These include engine parts, brakes, gear assemblies and wiring harnesses.
Reports in The Economic Times and Business Standard say that American auto manufacturers depend on Indian components to keep production costs low. A 25% tariff could raise car repair costs and disrupt assembly lines.
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First Published:
July 30, 2025, 18:49 IST
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