India’s telecom and agriculture sectors have emerged among the worst-hit by tariff hikes imposed under U.S. President Donald Trump’s trade policies, according to a report by EY.
In the telecom sector, tariffs on Indian exports to the U.S. have surged from 0% to 26% as of April 9, 2025, impacting $6 billion worth of trade. Despite the increase, India remains more cost-competitive than China and Vietnam, which are facing even steeper duties. The report suggests that initiatives such as Mission 500 and accelerating the Bilateral Trade Agreement (BTA) with the U.S. could help mitigate the impact. It also recommends extending the Production Linked Incentive (PLI) scheme beyond 2026 to support the sector’s growth.
The agriculture sector has seen tariffs rise sharply from 4% to 31%, affecting $5.5 billion in exports. This significant hike threatens the sector’s global competitiveness. While India maintains an edge over peers like China and Vietnam, it still trails behind countries such as Canada, Mexico, and others in Latin America, which benefit from lower tariffs and stronger U.S. market access. EY advises that finalizing the BTA should be a top priority, given agriculture’s economic importance.
The auto components sector is also under pressure, with tariffs jumping from 2.5% to 25% on $2.1 billion worth of exports. This affects critical components like engines, transmissions, and powertrains. As the 25% duty applies to all countries uniformly, India gains no preferential advantage over competitors like China. The report recommends that India negotiate for concessional tariffs in future trade talks.
In the textile sector, exports worth $9.5 billion to the U.S. will now face tariffs ranging from 33% to 36%, up roughly 27%. While these increases are significant, India still holds a relative advantage, as competing exporters such as China, Vietnam, and Bangladesh are subject to even higher tariff rates.
