The US has elevated tariffs on Indian goods to a surprising 50%, sparking a fresh argument on India’s economic strategy. The move, intended at punishing India for its continued Russian oil imports, is expected to reshape trade, policy, and partnerships.
Tariff Surge Shakes Key Sectors
The 50% tariff, declared by President Donald Trump, aims a vast array of exports, together with textiles, gems, jewelry, leather goods, shrimp, carpets, and furniture, affecting around two thirds of India’s exports to the US. Evaluations vary:
• The US is likely to slash Indian exports by $37 billion in FY25
• The new duty may affect up to $48.2 billion value of exports
• Sectors such as textiles, gems, jewellery, prawn, and furniture face swift export declines of up to 70%
India Weighs Recovery: Retaliation or Reform?
Industry bodies caution of severe job losses and falling competitiveness. Gujarat exporters, particularly in textiles and engineering, account potential order cancellations up to one third and need emergency relief like subsidies and loans. Jharkhand trade sectors, along with MSMEs in steel and automobile components, expect limited impact, but ambiguity remains.
Policy Response and Diversification Push
Prime Minister Modi emphasized on financial safeguarding like GST simplification, tax relief, and exporter incentives to buffer the blow. Export variation is underway, with focus fluctuating toward markets in the EU, Latin America, Africa, and Southeast Asia. Russia has also stated support, offering Indian goods easier entree to the Russian market and accusing the US duties as unjustified.
Self Reliance or Global Pivot?
The outlook centers on India’s choice. Will it react with its own duties, or double down on export modification and self reliance? While short term distractions are severe, analysts believe policy restructurings and market shifts could preserve long term growth, though forecasts show an uncertain GDP drag in FY 2025, with retrieval expected in FY 2026.
Also Read: Will China Be Next In The Tariff Spotlight? You May See It In Prices Before You See The Headlines
Ankur Mishra is a journalist who covers an extensive range of news, from business, stock markets, IPOs to geopolitics, world affairs, international crises, and general news. With over a decade of experience in the business domain, Ankur has been associated with some of the reputed media brands. Through a sharp eye on global marketplaces along with deep insights and analysis of business strategies, Ankur brings simplicity to the complex economic matrix to decode market trends and empower people.
He is committed to entrenched data, facts, research, solutions, and a dedication to value-based journalism. He has covered trade tariff wars, international alliances, corporate policies, government initiatives, regulatory developments, along with micro- and macroeconomic shifts impacting global fiscal dynamics.
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