May 29, 2025,
The USA Leaders
Former U.S. President Donald Trump has once again taken center stage in global trade debates, this time with a bold new tariff threat aimed squarely at India. With Trump pushing for a sweeping 26% tariff on Indian imports into the United States, industries across India are staring at what experts warn could be a $10 billion economic jolt.
This comes just as India’s tech and electronics exports, particularly from rising giants like Dixon Technologies—an Apple supplier—were poised to boom under Apple’s global diversification strategy.
What’s Trump Saying?
Speaking at a campaign event in Arizona earlier this month, Trump reiterated his long-standing stance on “unfair trade practices,” naming India among countries he accuses of “taking advantage of American markets.”
“It’s time we stop letting India and China flood our country with products that kill American jobs. We will put a 26% reciprocal tariff on Indian goods if they don’t play fair,” Trump said, igniting a global reaction.
What’s at Stake for India?
A 26% new tariff threat on Indian goods could hit multiple sectors—electronics, textiles, auto parts, pharmaceuticals, and more. India’s exports to the U.S. were valued at over $78 billion in 2023. A 26% tariff could disrupt nearly $10 billion worth of trade, warn economists at Kotak Institutional Equities.
One of the biggest shockwaves would hit the electronics sector. Dixon Technologies—India’s leading contract manufacturer for smartphones, TVs, and consumer goods—could see its margins squeezed overnight.
“Dixon is a key assembler for Apple, Motorola, and others. Any tariff that limits U.S. demand can severely hamper its export push,” says Rahul Mishra, Trade Analyst at IIFT.
Apple’s Big Bet on India Now in Doubt?
Apple has ramped up its India manufacturing efforts since 2023, aiming to produce 60–65% of its iPhones in India by late 2025. Foxconn, Apple’s top manufacturing partner, recently pledged a whopping $1.5 billion investment for a Chennai-based facility.
But a new tariff could derail Apple’s plan to make India its “next China.”
“This tariff would disrupt the global supply chain that Apple has painstakingly built in India,” said Gene Munster, Managing Partner at Deepwater Asset Management, during a recent episode of CNBC’s TechCheck.
India Rushing to Finalize Deal Before July 9
Trump’s proposal has prompted urgent negotiations. India and the U.S. are now racing to sign an interim trade deal before the July 9 deadline, when the 26% tariff could take effect.
“Talks are progressing well. Both sides are hopeful of a resolution by June 25,” said a senior Indian commerce ministry official.
This would be a temporary arrangement until a more comprehensive U.S.-India Free Trade Agreement (FTA) is negotiated. The two nations aim to boost bilateral trade to over $500 billion by 2030, from $191 billion in 2023.
How This Impacts You
For Indian exporters: A 26% tariff means sudden price hikes for U.S. customers and fewer orders.
For U.S. retailers: Electronics, garments, and pharma products from India could become more expensive.
For Apple fans: Expect potential price bumps in iPhones and accessories assembled in India.
For investors: Indian export-heavy stocks could see high volatility in the coming weeks.
The Big Picture
Trump’s “America First” rhetoric might win applause at rallies, but experts warn of global ripple effects. For India, it’s a reminder that no economic strategy is immune to politics, especially U.S. election-year politics.
“This isn’t just about tariffs. It’s about positioning, influence, and control over the next phase of global manufacturing,” said Dr. Arvind Panagariya, former Vice Chairman, NITI Aayog.
