In the wake of renewed tariff actions by the United States, Indian exporters are experiencing sector-specific impacts. While sectors like auto and metals face considerable challenges, others such as pharmaceuticals, textiles, and electronics manufacturing services (EMS) may stand to gain, positioning India as a potential alternative in global supply chains.

Auto Sector Faces Direct Hit
Tata Motors is likely to bear the brunt, with over 20% of its consolidated revenues coming from exports to the US, yet lacking any manufacturing base in the country. Other auto component exporters such as Bharat Forge (40% revenue from North America), BKT (17%), RK Forgings (26%), and Sona BLW (43%) are also under pressure due to tariff escalations.

Textiles May Benefit from Order Diversion
India’s textile and apparel industry, historically constrained by stiff competition from major exporters, could benefit from reciprocal tariffs imposed on rivals. While a slowdown in US demand remains a risk, potential order shifts toward Indian suppliers may mitigate volume declines.

Chemical Sector: Relative Advantage Over China
Exporters in the specialty chemicals space are likely to face a marginal slowdown in demand. However, India’s additional tariff of 27% remains lower than China’s 34%, offering a competitive edge. Key beneficiaries include SRF and Navin Fluorine. Meanwhile, PI Industries, despite high US exposure, may remain insulated due to patented products. Domestically focused players like Coromandel and Chambal Fertilizers are also poised to gain.

Pharma Sector: Continuity in Exemption
Pharmaceutical exports are currently exempted from US reciprocal tariffs. The exemption is expected to continue, offering stability to top players. Sun Pharma, Lupin, Aurobindo Pharma, and Cipla are well-positioned in this environment, given their scale and regulatory preparedness.

Metals & Energy: Mixed Outcomes
For the metals sector, no new tariffs on steel or aluminum were introduced, but the existing 25% duty continues. This is likely to weigh on companies like Tata Steel, Jindal Stainless, and AIA Engineering. Companies like Hindalco (via Novelis), Tube Investments, and Blue Star may see varied impact depending on their export footprint. In energy, while utilities and renewable developers are unaffected, Indian solar PV cell and module exporters face pricing pressures abroad.

Consumer Electricals and EMS: Long-Term Positives
Cables and wires manufacturers benefit as tariffs on Indian goods remain lower compared to other competing nations. For EMS (Electronics Manufacturing Services), the outlook is optimistic. An 8–10% duty differential and cost competitiveness against China and Southeast Asia could drive long-term gains.

Building Materials: Risks of Domestic Dumping
About 8% of India’s tile exports are US-bound. A decline in American demand may trigger excess inventory and potential dumping in the domestic market, pressuring local prices and margins.

Conclusion
The evolving tariff landscape is reshaping global trade dynamics. While Indian exporters must brace for short-term volatility in sectors like auto and metals, strategic advantages in pharmaceuticals, chemicals, and EMS may accelerate India’s role in global supply diversification.