Baba Kalyani: Very Difficult To Mitigate A 50% Tariff, Customers Believe A Political Solution Will Be On Table

In a stark assessment of the ongoing US-India trade tensions, Bharat Forge Chairman Baba Kalyani has reiterated his 'wait and watch' approach amid the fluid tariff situation under President Donald Trump's second administration.

Speaking in a recent CNBC TV18 interview, Kalyani emphasized that while potential US trade policy changes may not severely impact India's Make in India initiatives in the defence sector, the broader implications for Indian exports are dire.

Trump's executive order, effective from August 6, 2025, imposed an additional 25% tariff on Indian goods, escalating the total to 50%—the highest among US trading partners.

This move, cited as retaliation for India's procurement of Russian crude oil, has sent shockwaves through India's $434 billion merchandise export engine.

According to a Ventura Securities report, India could face an annual export loss of USD 5-6.75 billion, with the electronics sector potentially losing $20-30 billion in opportunities over the next few years.

"Our exports to the US are roughly about US $200 million. All our customers are still supporting us. But obviously the 50% number is undoable", he added.

"Nobody has deferred any purchases. Matter of fact, we had a talk with our biggest customer at early morning breakfast, and he said we must go ahead with the investments we had planned...", he further said.

Analysts echo this, warning of wider economic fallout, including diminished competitiveness against regional peers and rising US prices due to the trade war. Prime Minister Narendra Modi has vowed no compromise on farmers' interests, with trade talks slated to resume on August 25.

Kalyani's comments come as US stocks shrug off the tariffs, but Indian exporters label it a 'severe setback'.

As of today, August 8, 2025, the Ministry of Commerce is exploring diversification to markets like the EU and Middle East to cushion the blow. This development underscores the volatility of Trump's policies, which have raised average US tariffs to 18.3% by August 2025, representing 5% of federal revenue. Industry leaders like Kalyani urge swift diplomatic action to safeguard India's economic interests.