Trump's tariffs to shake up engineering and electronic goods exports

Subscribe to enjoy similar stories. New Delhi: The reciprocal tariffs imposed by US President Donald Trump will disrupt Indian exports in key sectors like engineering and electronic goods, potentially reshaping supply chains and cutting export revenue as businesses brace for the impact.

The US is one of India's largest trading partners and its top export destination, with bilateral merchandise trade reaching $119.72 billion in FY24, including $77.52 billion in exports and $42.20 billion in imports. According to a report by Kotak Institutional Equities on Thursday, key export sectors like engineering goods, and specialty chemicals are among the worst impacted by the reciprocal tariffs.

"The imposition of a uniform 26% reciprocal tariff on India’s exports to the US will likely have a large negative impact on the profitability and possibly volumes of sectors and companies with a meaningful portion of their revenues from the US market," the report said. "We doubt companies will be able to change and/or reroute exports meaningfully, leading to companies likely having to absorb a decent portion of the higher tariffs.

We see second-order price competition among exporters to the US and other countries as global trading patterns adjust to high tariffs in the US," it added. India's exports to the US in FY24 included $17.63 billion in engineering goods and $10.05 billion in electronics, compared to $18.68 billion and $5.76 billion, respectively, in the previous year, according to the commerce ministry.

Notably, the US is among the few countries where India enjoys a trade surplus, which rose to $35.33 billion in FY24 from $27.69 billion the previous year. "The tariff reset will reshape industry competitiveness across export- and