US President Donald Trump’s decision to impose 25 per cent tariffs and additional penalties on imports of goods from India from August 1 has drawn concerns from industry leaders and trade experts for its impact on India’s exports. However, experts said it is also an opportunity for India to scale up and diversify, with FTAs being finalized with several countries.
They also said that India will not be impacted to a very great extent, due to some of the competing markets facing higher tariffs from the United States.
Speaking to ANI, economist Suriya Narayanan called the tariffs a “setback for Indian exporters.”
“This is a setback to India because India was exporting pharmaceuticals, copper, metals and more with zero tariffs. Now India has to pay for products exported to the US. This will impact Indian exporters… Indian trade will be affected, and Indian exporters expect some concessions,” he said, adding that an American trade team will visit India on August 25 to continue discussions.
Corporate lawyer H.P. Ranina pointed out that the 25% tariff is still lower than the duties imposed on Chinese and Bangladeshi goods.
“The US government can legally impose tariffs from August 1. It will affect current export contracts, many of which have already been put on hold. Still, these 25% tariffs are less than those on Chinese and Bangladeshi goods. Indian leather goods are cheap, so the impact might be minimal. As for the penalty, we don’t yet know the specifics,” he said.
Gem and jewellery industry leaders also warned of potential job losses.
Rajesh Rokde, Chairman of the All India Gem and Jewellery Domestic Council, said, “This is very sad. The tariffs have increased from 10% to 25% starting August 1. This might impact America more than India. Indian jewellery is exported worldwide. When there was a 10% tariff, around 50,000 people faced unemployment. Now, over 1 lakh could be affected. However, India has found alternative trade routes with the EU and the Middle East.”
Vice-Chairman Avinash Gupta said that Free Trade Agreements (FTAs) with the UK, Australia and others would help India diversify. “It will affect the gem and jewellery industry, but the Indian government has done FTAs with the UK, Australia and others. The US is a big market, but it’s not the only one. This hurts, but it won’t stop us.”
Pavan Choudary, Chairman of the Medical Technology Association of India (MTaI), called the move “economically shortsighted and strategically misguided.”
“As a sovereign nation, India makes independent choices in defence and energy based on national interest. Attempting to punish those decisions through coercive trade measures is inappropriate and counterproductive,” he said.
Choudary likened the move to the 1930 US Smoot-Hawley Tariff Act, which triggered global retaliation and worsened the Great Depression. He also questioned whether recent statements in Indian Parliament denying Trump’s role in the Indo-Pak ceasefire influenced this drastic step.
Subhash Goyal, Chairman of the Tourism Expert Committee at the Chamber of Commerce, called it a “sad day for Indian exports”, saying the tariffs would slow exports, hit manufacturing, and ripple through the economy.
“It is a sad day for Indian exports. India exports over USD 100 billion and has a surplus of over USD 40 billion. This will slow down our exports, affect manufacturing, and also hurt American consumers. We’ll need to diversify export markets and refocus on Asia and Europe,” he said.
Dilip Kumar, Chairman of Medical Tourism at the Chamber of Commerce, said the American market depends heavily on Indian medical exports and warned costs would rise for US consumers.
“He (Trump) is trying to damage India’s economy, but he’ll end up hurting his own people. The US relies on Indian medical equipment and disposables. Treatment costs in the US will increase. India will survive and find new routes,” he added.
Ranjeet Mehta, CEO of PHDCCI, said this is a chance for India to scale up and realign global supply chains.
“The US is recalibrating its policy by imposing tariffs on India, China, Vietnam and Bangladesh. There may be short-term pain for MSMEs, but we also see opportunity. India has a demographic advantage, tech agility, and credibility. FTAs with the UK and others will help India emerge as a strong trade partner,” he said.
Manoranjan Sharma, Chief Economist at Infomerics Ratings, said Indian industries would need to reposition.
“The US is our largest trading partner. There will be an impact, but trade agreements with the UK, EU, and the Middle East can offset it. Still, exporters will face income and profit loss,” he said.
Trump, in a Truth Social post, said India will face 25% tariffs and penalties for its high tariffs, trade barriers, and its military and energy ties with Russia. He claimed India has done relatively little business with the US due to these reasons.
Over recent months, India and the US were negotiating an interim trade deal. However, India was hesitant to open the agriculture and dairy sectors. Agriculture remains vital for livelihoods in India.
India and the US aim to increase bilateral trade to USD 500 billion by 2030, with a full trade agreement expected by late 2025.
(With inputs from ANI)
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