US President Donald Trump has doubled down on his protectionist trade policies by imposing an additional 25% duty on Indian goods, pushing the total tariff burden to 50%. While Trump brands India a "tariff king", data shows that India has gradually eased tariff and non-tariff barriers in recent years, particularly benefiting the US.
Still, the latest move could hit labour-intensive Indian industries hard and has prompted businesses to scout for alternatives abroad.
Auto parts industry: Half of $7-Billion exports at risk
India exports $7 billion (Rs 61,000 crore) worth of auto parts to the US every year. With tariffs doubling to 50%, the industry fears a severe blow. Read full report
Earlier: 25% duty on cars, small trucks, and parts
Now: 50% duty on same items
Components for CVs, tractors, earthmovers also hit
A senior auto industry executive told ET that the tariff will “wipe out price competitiveness.”
Jewellery exporters eye Dubai, Mexico to escape the ‘doomsday’
With the US being India’s largest jewellery export market (worth $10 billion), the 50% duty is seen as catastrophic. Read full report.
UAE faces just 10% duty
Mexico pays 25%
India may pay 50%
Gem & Jewellery Export Promotion Council chairman Kirit Bhansali called it a “doomsday” and said exporters are exploring new manufacturing bases abroad.
Textile industry wants raw cotton duty removed for trade bargain
The Indian textile industry has proposed removal of the 11% duty on raw cotton imports as a bargaining chip in trade talks. Read full report.
India may offer lower tariffs on US farm goods:
Walnuts, almonds, apples, cranberries.
In return, it could push for better access for garments and yarns
Seafood sector may lose Rs 24,000 crore opportunity
India exports Rs 60,000 crore worth of seafood, mostly shrimps, to the US annually. The 50% duty threatens to shrink nearly Rs 24,000 crore in business. Read full report.
Competitors pay lower US tariffs:
Ecuador: 10%
Indonesia: 19%
Vietnam: 20%
India’s geographical disadvantage and higher tariff burden may shift orders elsewhere.
Pharma may escape the tariff hammer, for now
So far, pharmaceutical exports remain spared, likely due to a US national security review under Section 232 of the Trade Expansion Act, 1962. Read full report.
India’s drug makers fear future retaliation, especially if tariffs become a bargaining tool tied to Russian oil imports.
The US is still investigating pharma imports, leaving the door open for future action.
Broader economic fallout: Jobs, capex, and rupee at risk
Economists warn that Trump’s tariff strike could disrupt India’s growth story- Read full report.
Labour-intensive sectors like textiles, gems, and seafood will feel the heat
Private investments (capex) may slow due to reduced export visibility
The rupee could weaken if exports shrink significantly
“The second-round impact on capex, domestic manufacturing and labour markets could emerge as a key risk,” said Sakshi Gupta, Principal Economist, HDFC Bank.
With bilateral talks expected soon, much hinges on whether diplomacy can reverse this tariff tide—or whether Indian exporters will be forced to shift supply chains out of India.
Source Name : Economic Times