A recent report by EY sheds light on the impact of increased US tariffs on key Indian export sectors, with telecom and agriculture among the hardest hit. Despite the setbacks, India’s telecom industry stands resilient, maintaining a competitive position over regional rivals.
The report reveals that from April 9, 2025, the US raised tariffs on Indian telecom exports from 0% to a steep 26%. With annual exports to the US valued at around $6 billion, this sudden spike in duties could have had a significant impact. However, the report emphasizes that India still retains an edge over China and Vietnam, whose telecom sectors are facing even harsher tariff hikes.
To counter the pressure, EY recommends that India strengthen initiatives like Mission 500 and expedite the finalization of the Bilateral Trade Agreement (BTA) with the US. Additionally, it proposes the extension of the Production Linked Incentive (PLI) scheme beyond its current 2026 deadline to support sustained growth in the telecom sector.
The agriculture sector, too, is under strain. Tariffs on agricultural exports have jumped from 4% to 31%, affecting $5.5 billion worth of trade. EY notes this sharp increase threatens the competitiveness and growth trajectory of Indian agriculture in the US market. Given the sector’s significance to India’s economy, the report urges the government to prioritize the US-India BTA negotiations.
India’s auto components industry isn’t spared either. Exports worth $2.1 billion to the US will now face a uniform 25% tariff, up from the earlier 2.5%. Components like engines, transmissions, and powertrains are directly affected. As this duty applies equally to all exporting countries, India does not benefit from any comparative advantage. EY suggests negotiating concessional tariffs in future trade discussions to mitigate this burden.
The textile sector, with $9.5 billion in US exports, now faces tariffs ranging from 33% to 36%, up by an average of 27%. Yet, India still holds a slight upper hand, as competing exporters like China, Vietnam, and Bangladesh are subject to even higher tariffs.
The textile sector, with $9.5 billion in US exports, now faces tariffs ranging from 33% to 36%, up by an average of 27%. Yet, India still holds a slight upper hand, as competing exporters like China, Vietnam, and Bangladesh are subject to even higher tariffs.