The brand new country-specific tariff regime leaves India among the many worst-hit exporters in Asia, second solely to China, which faces a 30% tariff. In distinction, rivals like Vietnam, Bangladesh, and Malaysia are topic to decrease duties starting from 15% to twenty%.
“This places Indian exports at a transparent drawback throughout most sectors,” GTRI mentioned in its evaluation, noting that solely prescribed drugs, power merchandise, crucial minerals, and semiconductors have been spared.
The brunt can be felt throughout labour-intensive and high-volume sectors. “Outdoors these, Indian items are below strain,” GTRI mentioned. “Consequently, India's exports to the US — at present its largest export market — are projected to say no by almost 30 per cent.”
GTRI founder Ajay Srivastava flagged garment exports as among the many worst hit. Knitted and woven clothes, every price $2.7 billion, now face tariffs of 38.9% and 35.3% respectively — a lot larger than the charges imposed on items from Vietnam, Bangladesh, and Cambodia. Dwelling textiles like towels and bedsheets, which collectively fetch India $3 billion in exports (half of it from the US), now appeal to a 34% obligation.
Shrimp exports, valued at $2 billion and accounting for almost a 3rd of worldwide provide, can even take successful with the 25% tariff nullifying India's value benefit over rivals like Canada and Chile, who profit from free commerce agreements with the US.Jewelry exports price $10 billion — 40% of India's international jewelry commerce — now face a 27.1% obligation. “With the sector including simply 3-4 per cent in worth, margins are skinny,” Srivastava mentioned, including that mechanical gold jewelry exports price $3.6 billion are prone to be hit the toughest.The strain isn't restricted to textiles and jewelry. Metallic exports — primarily metal, aluminium, and copper — totalling $4.7 billion, are anticipated to see diminished demand from US infrastructure and power consumers because of the worth surge. Engineering items, together with $6.7 billion price of equipment and $2.6 billion in auto parts, now face tariffs above 26%, placing them at an obstacle in comparison with zero-tariff items from Mexico and 15% tariff items from Japan.
Even the place tariffs haven't but been imposed, dangers stay. Petroleum exports of $4.1 billion proceed to be duty-free, however India's use of Russian crude might set off penalties. Prescription drugs ($9.8 billion) and smartphones ($10.6 billion) are at present exempt, however Trump has hinted at future tariffs on Indian medicines and tighter scrutiny on electronics that embrace Chinese language parts.
GTRI doesn't see a straightforward repair in redirecting exports to different markets both. “Exporting extra to different nations to make up for losses within the US market will not be simple,” Srivastava mentioned.
To melt the blow, GTRI has known as on the federal government to revive the Curiosity Equalisation Scheme, which was discontinued final yr. “Regardless of its low fiscal value, the scheme was withdrawn. GTRI recommends relaunching it with a Rs 15,000 crore annual finances and a five-year dedication,” Srivastava mentioned, arguing it could decrease borrowing prices for MSMEs and enhance competitiveness.
The assume tank additionally urged establishing a devoted helpdesk for exporters, leveraging commerce agreements extra strategically, and inspiring new exporters to diversify India's international commerce footprint.
With inputs from PTI
