US Imposes Unprecedented 50% Tariff on Indian Imports: These Stocks Have High US Exposure

In a move described by Indian industry groups as unfair, unjustified, and unreasonable, US President Donald Trump on August 6, 2025, signed an executive order imposing a punitive additional 25% tariff on most goods imported from India—on top of the 25% tariff announced the previous week. 

This brings the total US tariff on most Indian goods to 50%, the highest rate imposed by the US on any country worldwide. Only Brazil now shares a similarly elevated tariff status. 

The bold measure, framed as a penalty for India’s ongoing purchase of Russian oil, is set to take effect on August 27, 2025, after a 21-day window for compliance and limited exemptions for goods already in transit.

Unpacking the Impact: Which Sectors and Stocks Have High US Exposure?

According to the Federation of Indian Export Organisations (FIEO), this order will directly impact about 55% of Indian exports to the US. The tariff will spare only a narrow range of goods — primarily pharmaceuticals, mobile devices and parts, energy products, IT services, and semiconductor components. For all other sectors, the tariff shock promises severe disruption.

Sectors Facing the Brunt

Textiles and Apparel: The US is the single largest market for Indian garments. Stocks like Himatsingka Seide (83% FY24 US revenue share), Gokaldas Exports (77%), Indo Count (70%), and Welspun Living (65%) face a sudden spike in costs. 

Historically, Indian textiles and garments entering the US faced a Most Favored Nation (MFN) tariff of 8–12%, depending on the product category. However, following the policy change effective August 27, 2025, the tariff burden has skyrocketed to an eye-watering 58–62% for Indian products. This sharp escalation stems from a new punitive 50% ad valorem tariff imposed by the US, which is applied on top of the existing MFN rate and not as a flat 50% duty. Under US trade law, tariffs are applied sequentially. That means the 50% penalty is levied on the price after the MFN duty is added. FIEO estimates a 30–35% loss in competitiveness versus rival exporters such as Vietnam and Bangladesh.

Gems & Jewellery: India’s diamond and jewelry exports, with the US accounting for nearly a third, face rising risks amid shifting trade dynamics. Titan, through its Tanishq brand, is the largest listed exporter to the US in the organized space, with FY24 exports of around ₹350 crore, just 1–2% of its total revenue. However, a potential drop in US orders as buyers pivot to Southeast Asia could impact sector earnings and employment.

Leather Goods: Once a major beneficiary of low US entry costs, leather goods now suffer added headwinds. Top firms such as Superhouse and Mirza International derive around 30% of their revenues from the US, income now in jeopardy due to slashed price competitiveness.

Auto Ancillaries and Engineering Goods: The US market is prominent for auto companies like Bharat Forge (25% FY24 US revenue share), Ramkrishna Forgings (27%), Sona BLW (40%), and Tata Motors (23%). Engineering goods, worth nearly $19 billion in annual exports, including precision components and auto parts, risk major market share and margin erosion.

Chemicals: Indian chemicals, previously levied only 1–2% US tariffs, will now invite a 50% tariff, directly impacting export leaders like Aarti Industries and Atul Ltd, which generate 30%+ of their revenue from the US.

Shrimp and Marine Products: The US is India’s largest buyer of frozen shrimp and other marine products. Listed exporters such as Avanti Feeds and Apex Frozen Foods will bear the brunt as US retail chains shift suppliers or renegotiate prices drastically.

*Percentages reflect FY24/25 company disclosures; exposures fluctuate with export cycles and order patterns.

What Remains Exempt?

The executive order specifically exempts pharmaceuticals (finished drugs, APIs), mobile phones and parts, energy (oil, gas, coal, electricity), semiconductors, computers, and IT services. This shields major players like Gland Pharma, Aurobindo Pharma, Dr Reddy’s, Zydus Lifesciences, and Lupin, for whom US sales exceed 38–50% of total revenue.

IT services, including software exports, business process outsourcing, and consulting, continue to face no tariffs, as US trade policy does not cover cross-border services of this nature.

Economic and Strategic Fallout of US's Hefty Tariff on India

Cost Surge and Order Cancellations: For critical sectors like apparel, leather, auto components, and chemicals, the cost disadvantage now stands at a staggering 30–35% against lower-tariff rivals, leading to immediate order losses and painful layoffs.

Stock Market Jitters: Export-heavy stocks have seen sharp corrections as investors price in revenue and margin shocks. Mid- and small-cap companies, with thinner capital buffers, face existential threats, while larger conglomerates may partially offset pain through diversification.

Competitiveness Shift: Countries such as Vietnam, Bangladesh, and Thailand, facing far lower US tariffs, are expected to gain market share at India’s expense, with supply chains potentially shifting out of India for US-bound shipments.

Conclusion

The 50% US tariff on most Indian exports represents a historic escalation in trade barriers, placing India alongside Brazil as the world’s highest-tariffed trade partners for US goods. While a handful of sectors—most notably pharma, IT, and energy—remain shielded, core export-driven industries face an acute and immediate threat. All eyes will be on the coming weeks to see whether the US and India can negotiate a resolution.

Disclaimer: The article is for informational purposes only and not an investment advice.