News Brief
What Businesses And Economists Have To Say About Donald Trump's India Tariff Move
US President Donald Trump (File Photo)
In a move that has drawn sharp responses from Indian industry bodies and economists, US President Donald Trump has announced a 25 per cent tariff on all Indian exports to the United States, effective 1 August, the News Agency ANI posted on X.
Announcing the decision on his social media handle, President Trump said, "Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World... INDIA WILL THEREFORE BE PAYING A TARIFF OF 25 per cent, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST 1st."
The announcement has sparked widespread concern among Indian exporters and trade experts, with fears of a significant impact on several sectors, including pharmaceuticals, gems and jewellery, medical equipment, and petrochemicals.
Harsha Vardhan Agarwal, President of FICCI, said, “FICCI is disappointed by the decision... While this move is unfortunate and will have a clear bearing on our exports, we hope that this imposition of higher tariffs will be a short-term phenomenon.”
Dilip Kumar, Chairman of Medical Tourism at the Chamber of Commerce, said, “He is trying to kill the market of the Indian economy, but it is not going to happen... The American market is dependent upon the Indian and Chinese markets... We can survive in the toughest times and bounce back.”
Gaurav Sansanwal, fellow at CSIS, noted that the tariffs will affect a range of Indian exports, adding, “This is a temporary negotiation tactic... not the final word on it.”
The jewellery industry, which counts the US among its largest markets, is expected to be hit hard. Rajesh Rokde, Chairman of the All India Gem and Jewellery Domestic Council, said, “This might impact America more than it will impact India... If the situation remains the same, then it can affect more than 1 lakh people.”
HP Ranina, a corporate lawyer, acknowledged the legal authority of the US to impose such tariffs but said, “These 25 per cent tariffs are still less than the tariffs imposed on Chinese and Bangladeshi goods.”
Economist Suriya Narayanan termed the move a setback, saying, “This will impact the Indian trade... India has to pay for products exported to the US.”
Subhash Goyal, Chairman of the Tourism Expert Committee, warned of a slowdown in exports and a ripple effect on manufacturing, while Ranjeet Mehta of PHDCCI said, “It will slow down some of our exports and there will be a ripple effect on our manufacturing... But it will also adversely affect the American consumers.”
Chief Economist of Infomerics Ratings, Manoranjan Sharma, said, “There is no doubt that this will cause a major hit on the incomes and profits of the companies exporting to the US.”
Dr Ajay Sahai, DG and CEO of FIEO, noted ongoing discussions with the US, saying, “The 25 per cent tariff imposed on India is a little disappointing for us, and we are constantly engaged with the US on the BTA. The 'penalty' President Trump has talked about is also not clear... In a few months, there will be BTA between India and the US and these tariffs will come down significantly...”
According to a Moneycontrol analysis of UN COMTRADE data, India’s bilateral trade with the United States almost doubled in the past decade, increasing from $64.6 billion in 2013 to $118.4 billion in 2024. This growth was primarily driven by exports, which surged 89.3 per cent, rising from $42 billion in 2013 to $79.4 billion in 2024, while imports saw a comparatively slower increase.
