The tariff escalation is predicted to disrupt bilateral commerce flows, serving extra as a device of hegemonic arm-twisting than a impartial coverage adjustment, he mentioned.
“The construction of those tariffs signifies a strategic try and re-align US commerce pursuits, disproportionately disadvantaging India,” Prof Tripathy remarked.
Additionally Learn: Trump's 50% tariff shock for India to hit quickly – what it means for progress, jobs, and hardest-hit sectors
India now faces a major financial problem that goes past a direct dip in export volumes, he mentioned and added that the steep tariff hike, elevating duties to 50 per cent on Indian items whereas reducing tariffs for opponents to 15-20 per cent might erode India's international competitiveness and pressure its macroeconomic fundamentals.
“This coverage shift redistributes market share to nations akin to Vietnam, Bangladesh, and Mexico,” the Finance college member of Xavier Faculty of Administration defined.
“The intent seems much less about commerce correction and extra about punitive focusing on of India,” he mentioned, including, nonetheless, not like in earlier many years, India enters this difficult part with elevated resilience because the nation has developed a diversified export base and strengthened its commerce relations throughout Asia, Africa, and the Center East.
“Monetary markets have responded inconsistently,” mentioned Prof Tripathy.
Whereas the tariff hike might shave off 0.3 to 0.5 share factors from GDP progress, India's sturdy home demand and a robust providers commerce surplus present important buffers, he mentioned.
The US tariffs have successfully doubled duties throughout a broad spectrum of Indian exports, with sharp will increase in delicate sectors.
Labour-intensive sectors akin to textiles, leather-based, gems and jewelry, and engineering items are significantly weak, he mentioned and added that competitor nations, together with Vietnam, Bangladesh, Thailand, Turkey, and Mexico, are well-positioned to realize market share.
Additionally Learn: Labour intensive sectors brace for 70% export collapse as US goes forward with 50% tariffs: GTRI
Auto elements face potential substitution underneath the framework, whereas key agri-exports like basmati rice and shrimp could also be displaced by suppliers from Ecuador and Vietnam.
Though India's IT providers sector stays unaffected, its constructive contribution might solely partially offset broader export declines, Prof Tripathy mentioned and in addition highlighted the counterproductive results on US companies.
“These tariffs will elevate enter prices for American firms, pressure revenue margins, and disrupt current provide chains with long-term inefficiencies even when the coverage is reversed later,” he mentioned, including regardless of the instant challenges, India's rising commerce diversification throughout West Asia, Africa, Southeast Asia, and deepening engagements with the EU, UK, and UAE present vital avenues for strategic rebalancing.
The “Make in India” initiative continues to develop the nation's industrial capability and helps its long-term export ambitions, he mentioned, including that India should now undertake a practical, multi-pronged technique and scale back its export dependence on the US to beneath 10 per cent within the medium time period.
“The duty forward is to transform this short-term financial strain into long-term strategic positioning by deeper alliances, vitality safety, and macroeconomic resilience,” he mentioned. PTI
