Donald Trump's tariff on India in numbers: Which sectors are hardest hit, which are exempt
&imwidth=600&imheight=450&format=webp&quality=medium "Donald Trump's tariff on India in numbers: Which sectors are hardest hit, which are exempt")
US President Donald Trump speaks during a cabinet meeting. Photograph: (AFP)
Donald Trump's tariff against India: Experts believe that India's merchandise exports to the US can drop by as much as 40-45 per cent. Here's how these tariffs will impact the Indian market and economy.
Donald Trump's additional tariff on India took effect today. The US government imposed the tariff as a penalty on New Delhi for continually buying Russian oil and weapons. The 50 per cent higherduties applyto those Indian products that either entered the US market or are withdrawnfrom warehouses for consumption.
The US administration exempted many sectors and categories from tariffs on Indian imports. The Global Trade Research Initiative said in a report that around 30.6 per cent of Indian exports will still enter the United States market duty-free.
Here's how Donald Trump's tariffs affect India
Experts believethat India's merchandise exports to the US can drop by as much as 40-45 per cent this year compared to last year. The Global Trade Research Initiative (GTRI) states that the export of these products to the United States, if tariffs continue, could decrease from $87 billion in 2024-2025 to $49.6 billion this year.
However, products belonging to the pharmaceuticals, electronics, and petroleum categories are exempt. The think tank says that exempted products will amount to $27.6 billion in FY25. Around 4 per cent of the exports, mainly auto parts, will attract a 25 per cent tariff rate.
Products are exported by countries like Vietnam, Bangladesh, Cambodia, and even China, and Pakistan will benefit from the tariffs on Indian products because they will get a cost advantage.
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The US accounts for 20 per cent of India's merchandise exports.
Sectors like textiles and apparel, gems and jewellery, shrimps, machinery and mechanical appliances, some metals (steel, aluminium, copper), organic chemicals, agriculture and processed foods, leather and footwear, handicrafts, furniture and carpets will be worst-hit, reported The Indian Express.
The home textiles and carpet industries will be decimated as both are dependent on exports. Exports account for 70-75 per cent of home textiles sales and the carpet industry 65-70 per cent of total sales. The US is their main market with 60 and 50 per cent exports respectively.
“While 30% of (India’s US) exports will remain duty-free and 4% will face a 25% tariff, the bulk—66% covering apparel, textiles, gems & jewellery, shrimp, carpets, and furniture—will be hit with a 50% tariff, rendering them uncompetitive," GTRI said.
There could be a 43% decline in shipments to the US, and hundreds of thousands of these jobs will be lost.
The Gem and Jewellery Export Promotion Council (GJEPC) said the US tariffs will disrupt supply chains and stall exports. The US is the sector's biggest market, with exports amounting to $10 billion in exports.