Increase in costs for smartphones and laptops due to Trump's recently implemented 25% import tariff - debunking the myths
In a recent development, Himani Jha, a renowned tech news writer, has penned an article comparing the prepaid recharge plans under Rs 500 offered by Jio and Airtel. However, the article does not provide specific details about the comparison between the two telecom giants.
Meanwhile, in the world of geopolitics, a significant trade sanction has been imposed by the US on India. As of August 2025, a 25% tariff has been imposed on Indian imports, in addition to an existing 25% reciprocal tariff, effectively raising duties on many Indian goods to 50%. This move is part of escalating trade measures aimed at pressuring India to stop importing Russian oil.
Background
The tariff was imposed by an executive order signed by President Donald Trump on August 6, 2025, citing India’s continued direct or indirect purchase of Russian oil as exacerbating a US national emergency related to Russia’s actions against Ukraine. This action expands US sanctions and tariff policies by targeting third countries that facilitate Russia’s oil trade, marking a new level of economic pressure beyond direct Russian sanctions.
The tariff takes effect August 27, 2025, with limited exceptions for goods already in transit. The US Commerce, Treasury, and State Secretaries will monitor and may recommend further actions against other countries engaged in similar trade with Russia.
Potential Impact on Indian Sectors
The tariffs raise the effective duty from 25% to 50% on most Indian goods, which may cause significant disruption in trade flows, increase costs for US companies importing from India, and pressure Indian exporters.
| Sector | Potential Tariff Impact and Significance | |------------------------|--------------------------------------------------------------------------------------| | Textiles | Subject to the tariff on general imports; could face a sharp increase in US market costs, reducing competitiveness. Textile exports are a significant part of India’s trade with the US, so the tariff could severely impact export volumes and revenues.| | Automobile Components | Many such components face tariffs; however, those under Section 232 tariffs may be exempt from the new 25% addition, but overall increased costs remain likely. The tariff may disrupt supply chains and increase costs for US automakers sourcing from India.| | Steel and Aluminium | Already under Section 232 tariffs, so the new 25% tariff does not apply here, but steel and aluminum trade tensions remain relevant broadly.| | IT Services | Mostly service exports, not goods, so direct impact from tariffs is limited. However, increased trade frictions could affect overall bilateral economic relations, indirectly influencing the IT sector.| | Pharmaceutical Industry | Some pharmaceutical goods may be exempt under existing agreements or specific exemptions mentioned in earlier executive orders; however, many drug components and finished products subject to tariffs could see higher costs and reduced US market access.|
Exemptions and Implications
Indian exporters have front-loaded shipments of exempted goods in anticipation of the new duty, resulting in a 17-18% hike in exports in early 2025 to over 20% by June. However, the article does not provide any new information about the exemptions from the tariffs for smartphones, laptops, pharmaceuticals, and a few other sectors.
In FY2025, India exported $14.6 billion worth of smartphones and $10.5 billion in pharmaceuticals to the US, which are not subject to the 25% tariff or the 10% baseline duties introduced in April.
Smaller and mid-sized exporters reliant on the US market will be affected by these high tariff rates, despite the exemptions providing temporary relief.
Trump stated that India's tariffs on American goods are high and called India's trade barriers the most strenuous and obnoxious non-monetary among all countries.
The tariff measures are expected to affect several major Indian sectors, including textiles, automobile components, steel and aluminium, solar equipment, IT services, and parts of the pharmaceutical industry. However, it is important to note that the tariff does not apply to smartphones, a few other sectors, laptops, and pharmaceuticals.
In summary, the US-India trade tensions have escalated with the imposition of a 25% tariff on Indian imports, effective August 1. The tariff's potential impact spans several key sectors, mainly textiles and manufacturing components, while partially sparing sectors like steel that already face US tariffs and largely not affecting IT services directly. The pharmaceutical sector may experience mixed effects depending on specific product classification and exemptions.
When not immersed in gadgets, Himani Jha enjoys exploring the vibrant culinary scene, discovering new cafes and restaurants. Himani Jha is a tech news writer at the platform, with a passion for smartphones and consumer technology.
[1] Source: https://www.bloombergquint.com/business/us-imposes-25-tariff-on-indian-imports-in-oil-row [2] Source: https://www.reuters.com/business/us-imposes-25-tariff-indian-imports-over-oil-purchases-2025-08-06/ [3] Source: https://www.cnbc.com/2025/08/06/us-imposes-25-tariff-on-indian-imports-over-oil-purchases-from-russia.html
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