India-US Trade Tensions Reach New Heights

The Chamber of Trade and Industry (CTI) has raised alarms over the US's decision to impose an additional 25% tariff on Indian goods, escalating the total duty to a staggering 50%. This move threatens to severely impact India's export-driven sectors.

CTI chairman Brijesh Goyal has urgently appealed to PM Narendra Modi, advocating for immediate strategic actions, including the consideration of retaliatory tariffs on US imports to India. The sudden policy shift by US President Donald Trump, effective from August 27, has left Indian exporters in a precarious position, with many shipments already en route or orders in progress.

The Ripple Effect Across Key Sectors

The implications of this tariff hike are vast, with the engineering goods sector, which exported Rs 1.7 lakh crore worth of products to the US in 2024, facing a direct hit. Similarly, the gems and jewellery, textile, and electronics sectors are bracing for significant challenges, potentially leading to a 10-15% drop in export volumes.

Electronics, especially smartphones, and the pharmaceutical industry are among the hardest hit, with the latter risking its competitive edge in the US market to countries like Vietnam.

A Call for Strategic Diversification

In response to these developments, the CTI is urging the Indian government to explore alternative markets such as Germany, the UK, Singapore, and Malaysia. Reducing dependency on US imports and seeking other global suppliers are also highlighted as critical steps to mitigate the impact of the tariffs.