India’s telecom and agriculture sectors have been significantly impacted by the tariffs imposed by US President Donald Trump.
The telecom industry has seen a dramatic increase in tariffs, which have risen from 0% to 26% as of April 9, 2025. Despite this hike, India’s telecom exports to the US, which total USD 6 billion, remain competitive, especially when compared to China and Vietnam, who are facing even higher tariffs.
The report suggests that initiatives such as Mission 500 and accelerating the Bilateral Trade Agreement (BTA) with the US could help the sector navigate these challenges. It also recommends extending the Production Linked Incentive (PLI) scheme beyond 2026 to sustain growth in the telecom sector.
Similarly, the agriculture sector has experienced a significant tariff increase from 4% to 31%, which directly affects USD 5.5 billion worth of Indian agricultural exports to the US. This tariff surge presents a major challenge to the sector’s competitiveness. However, the report notes that India still holds a competitive advantage over countries like China and Vietnam, maintaining its position in global trade despite the tariff rise.
While India fares better than some of its peers, it still lags behind countries like Canada, Mexico, and others in Latin America that enjoy lower tariffs and higher market shares.
EY suggests that the Indian government should prioritise finalising the US-India BTA, given agriculture’s importance to the economy.
The auto components sector is also under pressure. Exports worth USD 2.1 billion to the US will now face 25 per cent tariffs, up from earlier 2.5 per cent.
The hike affects crucial components such as engines, transmissions, and powertrains. Since the 25 per cent duty applies uniformly to all countries, India is not given any special advantage over others like China. The report called for the government to push for concessional tariffs in trade negotiations.
The textile sector, which has exports of USD 9.5 billion to the US, will now be subject to tariffs ranging between 33 per cent and 36 per cent. Although these rates are a significant increase, by about 27 per cent — India still enjoys a relative advantage, as rival exporters like China, Vietnam, and Bangladesh are facing even higher tariffs.
The report concluded that while the higher US tariffs pose a serious challenge to India’s export-driven sectors, India’s manufacturing strength and strategic policies can help retain a competitive edge. Swift progress on bilateral trade agreements and policy support will be key to ensure continued growth. Mathrubhumi