India’s global merchandise exports are likely to take a hit of only 1.87%, despite the United States imposing a 25% tariff on Indian imports, according to a new white paper released by the PHD Chamber of Commerce and Industry (PHDCCI).
The report, analyzing the implications of the tariff that came into effect on August 7, 2025, pegs the total potential export impact at $8.1 billion, a relatively small fraction of India’s total merchandise exports worth $86.5 billion in FY2025. The effect on GDP is projected at a negligible 0.19% (at real.)
“India continues to be the fastest growing economy among major global players. The tariff challenge, though notable in absolute terms, is manageable in its macroeconomic impact,” said Hemant Jain, President, PHDCCI.
The sectors most affected include engineering goods ($1.8 billion), electronics ($1.4 billion) , pharmaceuticals ($986 million), gems & jewelry ($932 million), and ready-made garments ($500 million).
PHDCCI has laid out a strategic response emphasizing market penetration, product development, market diversification, and on-shore manufacturing partnerships to counter the impact and enhance export resilience.
“This disruption offers an opportunity to accelerate export sophistication and geographic diversification,” Jain added.
Despite the headwinds, India’s growth outlook remains robust, with the IMF projecting 6.4% GDP growth in 2025-26, the highest among major economies.