Trump's 25% tariff threat is at risk of $ 87 billion to Indian exports

Copyright © HT Digital Streams Limit all rights reserved. US President Donald Trump began 25% rate for importing goods from India on Wednesday, in addition to an unspecified fine for Russian intercourse and involvement in the Brics group, but later added that the trade talk continued. (Lying Photo: Bloomberg) Summary The proposed duties linked to India’s high rates, non-tariff barriers and Russia ties-can important sectors such as textiles, pharmaceuticals and electronics disrupted and injured Gokaldas to Biocon. New -delhi: India’s $ 87 billion export pipeline faces fresh turmoil after President Donald Trump proposed a 25% reciprocal rate on Indian goods, which raises the tensions of the trade, a few days before a break will expire on such duties. The move threatens to disrupt sectors, ranging from textiles and electronics to pharmaceutical products and auto parts. Although the details of the proposed rates have not yet emerged, Trump’s statement, issued on Wednesday, has restored the markets and a shadow over the outlook of India’s short -term returns. An American delegation is scheduled to visit India on August 25 for bilateral trade discussions, but the final contours of the measures remain unclear. “While India is our friend, we have done relatively little business over the years because their rates are far too high, one of the highest in the world, and they have the most stravers and most ominous non-money barriers to any country,” Trump said on his social media platform Truth Social. The Indian government analyzes the potential impact of the 25% tariff on value and outbound exporter losses, the Ministry of Trade said in a statement issued on Wednesday. Madhavi Arora, chief economist at Emkay Global Financial Services, said the proposed rates would significantly increase the effective US service on Indian goods from an average of 10.7% to about 22%, after taking into account higher duties on exempt sectors such as buyer, steel and aluminum. This rate, she added, is already higher than most Asian economies facing, which hinders China. “We do not believe that the discussions are over,” Arora said, noting that, although negotiations appear to be stopped, geopolitical factors could drive a new round of involvement. “Even countries such as the United Kingdom, the EU, Japan and Indonesia, Vietnam that have signed trade agreements with the US are facing the increased rates despite large concessions. These transactions are no better than a trade war in many ways,” she said. India exported to the US in FY25 goods worth $ 87 billion, accounting for 2.3% of GDP, Arora said. Of these, five sectors – engineering ($ 19.16 billion), electronics ($ 14.64 billion), drugs and pharmaceutical products ($ 10.52 billion), gemstones and jewelry ($ 9.94 billion) and textiles ($ 10.91 billion) – Emethder $ 65.17 billion. According to the government’s estimates, approximately 75.3% of the export of merchandise to the US can be influenced by the proposed rates. “We have seen consignments of consignments over the past three months, so that exports can remain clumsy in the coming months unless the clarity emerges,” she added. Her current account model factors in a 3.5% contraction in export, although the total relationship between the current account-to-GDP ratio remains below 1%. Exporters flag rising costs “The 25% tariff on Indian manufactured goods by the US introduces new variables for exporters, especially in sectors such as electronics where supply chains are integrated worldwide,” says Abhishek Malik, executive director of Calcom Vision Ltd, who has LED Lighting Systems and BlDC hunters. “These measures can lead to higher cost structures and can affect future investment decisions and planning.” Vipul Shah, former chairman of the Gems and Jewelery Export Promotion Council (GJEPC) and an exporter himself, said the move could essentially damage the consignments: ‘This is a major setback for the jewelery and jewelery sector. The US is one of our largest markets, and if the revised tariff stays in place, exports could fall by about 30%. “Rajiv Nath, forum coordinator at the Association of Indian Medical Device Industry (directed), said the relative competitiveness of Indian firms could depend on how Chinese duties develop.” The clarity will come after August 12, when the duties on Chinese products are expected to be completed. They were increased to more than 50% earlier, but were temporarily reduced to 30%, “he said.” If the duties on Chinese medical devices return to more than 50% after August, while Indian goods face a 25% tariff, our export prospects against China will improve. However, both government and manufacturers will have to work to improve our competitiveness to compensate the 6% disadvantage compared to Indonesian and Vietnamese competitors. “Textile firms support for hit in the midst of uncertainty in the textile sector, the proposed rate of 25%, and the extra risk of an unknown fine, the sentiment weighed, especially because the expectations in the industry were a softer 90 days. 9% dependence, can have a limited impact. Pharmaceutical players are cautiously optimistic that Indian generics can be released from the proposed rates, similar to the zero tariff offered in the US-EU agreement. Pharmaceutical uncertainty, most Indian players expect, including Aurobindo, Dr. have some relief due to the preferred conditions of the country with the US. arising from the slowdown of US demand and price absorption along the value chain. The impact of the proposed US reciprocal rates in sectors is different. (30-35%) have minimal risk due to low exposure or the UK-EU trade coverage. that pharmaceutical businesses, especially Biocon, Sun Pharma and Dr Reddy’s, risk a 2-8% EPS hit in FY26, unless generic is released. Corp. Ltd. and Hindustan Petroleum Corps. Economic impact may be modest, but according to Goldman Sachs, according to Goldman Sachs, the proposed 25% reciprocal tariff by the US could cause an increasing trek of about 0.3 percentage points on India’s real GDP in 2025, above -on a previously estimated 0.2 percentage. 4% of GDP to the US final demand. Growth for 12% and 14% for 2025 and 2026, but warns against disadvantage risks.