Impact of US Tariffs on Indian Exports

Nearly 70% of Indian goods exports to the US, amounting to approximately $60.85 billion, are now subject to a 50% tariff imposed by the US. This development, as analyzed by the Indian Council for Research on International Economic Relations (ICRIER), affects just 1.56% of India’s GDP and 7.38% of its total exports, signaling no immediate catastrophe for its $3.9 trillion economy.

Sectors Most Affected

The burden of these tariffs is heavily concentrated in labor-intensive and high-value industries such as textiles and apparel, gems and jewellery, auto parts, and agriculture, particularly shrimp. These sectors are crucial for employment generation and the livelihoods of millions of workers and farmers.

Strategic Recommendations by ICRIER

ICRIER recommends a three-pronged strategy to mitigate the impact: smart negotiations with logic and rationality, immediate and targeted relief support for hard-hit sectors, and diversification of export markets. The report emphasizes the importance of turning short-term disruptions into long-term gains to reinforce India's position in the global economy.

Global Context and Future Negotiations

The tariff escalation follows US President Donald Trump's decision to double the levy on Indian goods, citing India’s continued imports of Russian oil. Despite these challenges, sectors like pharmaceuticals, energy products, critical minerals, and semiconductors remain unaffected. Talks on a Bilateral Trade Agreement (BTA) are underway, with the first stage expected to conclude by October-November 2025.