US President Donald Trump unleashed a barrage of tariffs going up to 99% against the country’s trading partners, making good on his long-standing threats and potentially dragging the world into a trade war as he sought to address a $1.2 trillion goods trade deficit and revive local manufacturing.
India faces a 27% reciprocal levy from April 9, lower than its regional competitors such as China (34%, in addition to 20% imposed in two earlier rounds), Vietnam (46%) and Indonesia (32%).
“This is Liberation Day, a long-awaited moment,” Trump said, using the White House Rose Garden as the stage for the announcement that the rest of the world had been dreading.
“April 2, 2025 will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to make America wealthy again.”
While his MAGA base cheered, critics said he risked undermining global growth, rampant inflation and tipping the US into recession. Global leaders criticised the tariffs while China and the EU indicated counter measures.
Global markets went into a tailspin amid concerns over retaliatory tariffs and global trade upheaval. India is “carefully examining” the implications of the tariffs and is also “studying the opportunities” that may arise from the differential levies on countries, the government said in a statement. Officials who did not want to be identified told ET that India isn’t too happy with the tariffs but is not overly worried either.
“This is not the best India could have expected but as it’s global trade policy, the US could not have left out any country,” said an official.
“Hopefully, we will be able to navigate well. Industry understands that there might be pain.”
Marine products, machinery, medical devices, and to a lesser extent gems and jewellery, are most impacted by the latest tariffs. Pharmaceuticals were exempted, giving a reprieve to exports worth $8 billion to the US in FY24.
Protectionism On the Rise
These tariffs on India products may not be in place for long as the country hopes to conclude a Bilateral Trade Agreement (BTA) with the US soon, one official told ET.
The stock market took the development in stride — the Sensex declined 0.42% and the Nifty was down just 0.35%.
Economists said India’s expected 6.5% growth in the current year could take a 30-60 basis point hit from the blow that exports will take and the spillover of slower global growth due to Trump’s measures.
The US has imposed 10-57% tariffs against 57 countries, fulfilling his election pledge to complete a task he had begun in his first term. Of these, 33 face higher tariffs than India. Those countries that haven’t been slapped with reciprocal tariffs face a baseline 10% levy.
Experts said the tariff calculation was based on the trade deficit and imports from each country and not the duty imposed by that country.
The chart noted India’s average tariff at 52%, and America’s “discounted” reciprocal tariff of 26%. White House documents, however, stated there will be a 27% additional duty on India.
“Uncertainty will spiral and trigger the rise of further protectionism. The consequences will be dire for millions of people around the globe,” EU chief Ursula von der Leyen said.
Likely BTA relief
Officials said that India already has an early mover advantage as it has been deeply engaged in negotiations for the BTA with the US for 50 days and that there are opportunities and challenges.
“Accordingly, discussions are ongoing between Indian and US trade teams for the expeditious conclusion of a mutually beneficial, multi-sectoral Bilateral Trade Agreement,” the commerce and industry ministry said in a statement. “The ongoing talks are focused on enabling both nations to grow trade, investments and technology transfers. We remain in touch with the Trump administration on these issues and expect to take them forward in the coming days.”
India is already negotiating a bilateral trade agreement with the US and the two countries are aiming to finalise the first phase of the pact by fall (September-October) of this year and targeting $500 billion bilateral trade by 2030 from $191 billion now.
India had a trade surplus of $35.32 billion in goods with the US in FY24.
Early conclusion of the proposed BTA would help dilute the impact of the tariffs, said SC Ralhan, president of the Federation of Indian Export Organisations (FIEO).
Industry impact
India’s exports of shrimp, carpet, medical devices and gold jewellery will face the brunt of the 27% additional import duties announced by the US.
Textiles and garments, electronics, telecom, smartphone and electronics, semiconductors, and pharma could get a lift as India’s competitors face higher reciprocal duties.
The US is the largest market for India’s shrimp industry. The product will now become less competitive in the US market due to the higher tariffs relative to other exporting nations such as Ecuador. The US already has anti-dumping and countervailing duties on Indian shrimp.
In carpet exports, India will lose out to Turkey.
FIEO said the duties pose a challenge but India is better placed than competitor nations as their goods would face higher taxes.
Gems and jewellery exporters termed the tariffs a major setback and urged the government to take steps to secure the long-term interests of the sector.
Steel industry executives said India will become more vulnerable to low-cost imports as the countries impacted may divert their shipments to the local market.
The Association of Indian Medical Device Industry (AiMeD) said exports may pose challenges to the sector's growth due to the additional taxes.
India's key exports to the US include drug formulations and biologicals ($8.1 billion), telecom instruments ($6.5 billion), precious and semi-precious stones ($5.3 billion), petroleum products ($4.1 billion), gold and other precious metal jewellery ($3.2 billion), ready-made garments of cotton, including accessories ($2.8 billion), and products of iron and steel ($2.7 billion).
“Net-net, it appears India’s export competitiveness to the US market stands far less impacted on a relative basis,” said Assocham president Sanjay Nayar. “Yet our industry should make concerted efforts to increase export efficiency and value addition, to mitigate impact of these tariffs.”
India faces a 27% reciprocal levy from April 9, lower than its regional competitors such as China (34%, in addition to 20% imposed in two earlier rounds), Vietnam (46%) and Indonesia (32%).
“This is Liberation Day, a long-awaited moment,” Trump said, using the White House Rose Garden as the stage for the announcement that the rest of the world had been dreading.
“April 2, 2025 will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to make America wealthy again.”
While his MAGA base cheered, critics said he risked undermining global growth, rampant inflation and tipping the US into recession. Global leaders criticised the tariffs while China and the EU indicated counter measures.
Global markets went into a tailspin amid concerns over retaliatory tariffs and global trade upheaval. India is “carefully examining” the implications of the tariffs and is also “studying the opportunities” that may arise from the differential levies on countries, the government said in a statement. Officials who did not want to be identified told ET that India isn’t too happy with the tariffs but is not overly worried either.
“This is not the best India could have expected but as it’s global trade policy, the US could not have left out any country,” said an official.
“Hopefully, we will be able to navigate well. Industry understands that there might be pain.”
Marine products, machinery, medical devices, and to a lesser extent gems and jewellery, are most impacted by the latest tariffs. Pharmaceuticals were exempted, giving a reprieve to exports worth $8 billion to the US in FY24.
Protectionism On the Rise
These tariffs on India products may not be in place for long as the country hopes to conclude a Bilateral Trade Agreement (BTA) with the US soon, one official told ET.
The stock market took the development in stride — the Sensex declined 0.42% and the Nifty was down just 0.35%.
Economists said India’s expected 6.5% growth in the current year could take a 30-60 basis point hit from the blow that exports will take and the spillover of slower global growth due to Trump’s measures.
The US has imposed 10-57% tariffs against 57 countries, fulfilling his election pledge to complete a task he had begun in his first term. Of these, 33 face higher tariffs than India. Those countries that haven’t been slapped with reciprocal tariffs face a baseline 10% levy.
Experts said the tariff calculation was based on the trade deficit and imports from each country and not the duty imposed by that country.
The chart noted India’s average tariff at 52%, and America’s “discounted” reciprocal tariff of 26%. White House documents, however, stated there will be a 27% additional duty on India.
“Uncertainty will spiral and trigger the rise of further protectionism. The consequences will be dire for millions of people around the globe,” EU chief Ursula von der Leyen said.
Likely BTA relief
Officials said that India already has an early mover advantage as it has been deeply engaged in negotiations for the BTA with the US for 50 days and that there are opportunities and challenges.
“Accordingly, discussions are ongoing between Indian and US trade teams for the expeditious conclusion of a mutually beneficial, multi-sectoral Bilateral Trade Agreement,” the commerce and industry ministry said in a statement. “The ongoing talks are focused on enabling both nations to grow trade, investments and technology transfers. We remain in touch with the Trump administration on these issues and expect to take them forward in the coming days.”
India is already negotiating a bilateral trade agreement with the US and the two countries are aiming to finalise the first phase of the pact by fall (September-October) of this year and targeting $500 billion bilateral trade by 2030 from $191 billion now.
India had a trade surplus of $35.32 billion in goods with the US in FY24.
Early conclusion of the proposed BTA would help dilute the impact of the tariffs, said SC Ralhan, president of the Federation of Indian Export Organisations (FIEO).
Industry impact
India’s exports of shrimp, carpet, medical devices and gold jewellery will face the brunt of the 27% additional import duties announced by the US.
Textiles and garments, electronics, telecom, smartphone and electronics, semiconductors, and pharma could get a lift as India’s competitors face higher reciprocal duties.
The US is the largest market for India’s shrimp industry. The product will now become less competitive in the US market due to the higher tariffs relative to other exporting nations such as Ecuador. The US already has anti-dumping and countervailing duties on Indian shrimp.
In carpet exports, India will lose out to Turkey.
FIEO said the duties pose a challenge but India is better placed than competitor nations as their goods would face higher taxes.
Gems and jewellery exporters termed the tariffs a major setback and urged the government to take steps to secure the long-term interests of the sector.
Steel industry executives said India will become more vulnerable to low-cost imports as the countries impacted may divert their shipments to the local market.
The Association of Indian Medical Device Industry (AiMeD) said exports may pose challenges to the sector's growth due to the additional taxes.
India's key exports to the US include drug formulations and biologicals ($8.1 billion), telecom instruments ($6.5 billion), precious and semi-precious stones ($5.3 billion), petroleum products ($4.1 billion), gold and other precious metal jewellery ($3.2 billion), ready-made garments of cotton, including accessories ($2.8 billion), and products of iron and steel ($2.7 billion).
“Net-net, it appears India’s export competitiveness to the US market stands far less impacted on a relative basis,” said Assocham president Sanjay Nayar. “Yet our industry should make concerted efforts to increase export efficiency and value addition, to mitigate impact of these tariffs.”
You may also like
Robert Trebor dead: Hercules and Xena Warrior Princess actor dies
'Entire process was executed flawlessly to deport Lawrence Bishnoi gang member from Dubai to Jaipur'
Man shot dead in Patna by unidentified assailants
IPL's first eight matches draw 288 mn TV viewers
White House postpones spring garden tour amid anti-Trump 'hands off!' protests
