CareEdge Ratings has released its report titled ‘US Tariff Impact on India – July 2025’, examining the economic implications of the newly imposed 25% tariff by the United States on Indian goods. This comes after delays in concluding a bilateral trade deal and could include Russia-linked penalty tariffs, reversing India’s earlier tariff advantage.
Despite the elevated duty, the report estimates a limited GDP impact of 0.3–0.4%, attributing resilience to India’s domestic-driven economy and a relatively low exposure of goods exports to the US (~2% of GDP).
Key sectors at risk include gems and jewellery, which may face heat from discretionary spending slowdowns. On the other hand, pharma and select electronics remain exempt from immediate tariff hikes.
The Indian rupee has reached a record low, attributed to the tariff shock, foreign portfolio investor (FPI) outflows, and a stronger US dollar. However, India’s current account deficit remains under control at 0.9% of GDP.
While India-US trade negotiations are still underway, the pace is expected to remain slow given India’s cautious stance on key sectors like agriculture and dairy.
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Click here to download the CareEdge Ratings report US_Tariff_Impact_on_India_-_July_2025
