1) Tariff shock
Trump’s social media post about a 25 percent tariff hike was a surprise, Indian markets remained volatile on the following day of trade Image: Andrew Harnik/Getty Images
On the evening of July 30, US President Donald Trump blindsided markets by announcing a sweeping 25 percent tariff on Indian imports, effective August 1, alongside an unspecified “penalty” linked to India’s energy and defence ties with Russia. The move compounds pressure on critical sectors like electronics, pharmaceuticals, and textiles, already grappling with stiff competition and tightening global supply lines. While New Delhi continues dialogue, the uncertainty itself risks stalling capital flows and increased volatility in India’s markets just as its international manufacturing ambitions gather steam.
2) Manufacturing under fire
US accounts for around 25 percent of iPhone shipments, at around 60 million units per year. Image: Ashish Vaishnav/SOPA /LightRocket via Getty Images
The US move to levy a 25 percent tariff on Indian exports has sparked fresh debate over its possible long-term impact on India’s manufacturing ambitions. According to industry sources, the electronics sector faces the highest immediate exposure, while auto components and industrial goods may be more insulated due to diversified supply chains. While India’s wage edge and policy incentives still offer an upside, sectors priced out by the tariff could see supply-wheel shifts toward rivals like Vietnam. Can diplomacy recalibrate the risk? Will tariff volatility stall India’s factory-led ambitions? Read to find out
3) Transitional, not transformative
There will be an incremental impact of the tariffs, particularly on clothing/textiles, jewellery and phones sectors Image: Indranil Mukherjee / AFP
While Trump’s 25 percent tariff bombshell rattled markets, economists Forbes India spoke to see it as ‘transitionary’, and not transformative. Corporate India remains cautiously optimistic, banking on salvaged diplomacy and a potential trade pact in the works. More importantly, they also believe that the Reserve Bank of India is unlikely to cut interest rates until at least December ruling out a knee-jerk reaction to the tariffs. After three consecutive 25 bps reductions earlier in 2025, experts argue that the RBI has already done its part and will now wait to see how inflation and growth evolve. The tariff shock is real, but monetary relief isn’t on the table just yet.
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1) Pharma braces for fallout
To lower costs for patients, the US started outsourcing, particularly cheaper generic drugs, from countries like India and China. Image: Amit Dave / Reuters
Though the Indian pharma sector has so far been exempted from the Trump tariffs, industry veterans warn that any rollback of that carve-out could destabilise the global supply of generic pharmaceuticals. India currently supplies nearly 40–50 percent of US generic drugs. With production infrastructure deeply embedded and no short-term alternatives in sight, a tariff may mean raising the drug prices and potential shortages for the American healthcare system. A crisis may lie ahead, not for India, but for the US health care delivery chain.
2) Protecting farms
US grown soya bean and corn could come from batches that had genetically modified crops, something Indian consumers are uncomfortable with. Image : Raquel Cunha / Reuters
Washington has pressed New Delhi to open its markets to US corn, soybean, dairy, and almond exports, but India has steadfastly refused. Agriculture contributes nearly 18–19 percent to India’s GDP and sustains two-thirds of its workforce, making it politically untouchable. American farm goods, backed by subsidies and advanced mechanisation, pose a stark threat to small, family-run Indian farms. India has to play hardball to protect domestic farm interests. As talks falter, India risks delaying a deal that was supposed to supercharge exports to its second-largest trading partner.
3) Disruption in numbers
Export of smartphones assembled in India has grown by about 700 percent in FY25 compared to the previous year and now occupies a significant share in US smartphone imports. Photo: Madhu Kapparath
India’s export engine, which grew nearly 65 percent from FY19 to FY25 and doubled the trade surplus with the US, now faces sharp turbulence. Smartphones, gems, jewellery, industrial machinery, and shrimp exports are among the most vulnerable to a newly imposed 25 percent tariff. While India’s pharma sector remains exempt for now, broader volatility looms as tariffs threaten to distort prices, disrupt demand, and reshape global trade flows. India’s growth story may still hold, but the numbers are flashing warning signals. An analysis in numbers.
4) Macarons Made in India
Chandni Nath Israni, who holds the India franchise for storied Parisian macaron-makers Laduree, at their Khan Market outlet Image: Amit Verma
Once a rare import reserved for elite cafés, the macaron has quietly evolved into a defining dessert of urban India. Led by pioneers like Pooja Dhingra—whose Mumbai-based Le 15 Patisserie introduced the city to Parisian-style bite-sized cookies—the sweet has now become a cultural touchstone across premium bakeries and gift hampers. Driven by rising disposable incomes, the influence of café culture, and social-media impact, the macaron is no longer niche: it’s becoming a symbol of celebration, aspiration, and indulgence across cities.
