US Imposes Tariffs on India: Which Industries Face the Biggest Impact?
US Imposes Tariffs on India: Which Industries Face the Biggest Impact?
The United States has imposed a 50 percent tariff on goods from India that threatens to hit billions of dollars in Trump trade policy India and undermine thousands of jobs in the world’s most populous country. The tariff, announced by US President Donald Trump, went into effect on Wednesday.
On July 30, the US had imposed a 25 percent Trump India tariffs and another 25 percent a week later. In both cases, the US had justified the additional taxes on India by its continuing to purchase Russian oil.
At 50 percent, the new tax is one of the highest the US has ever levied.
It will give India a significant cost disadvantage relative to China on many export products and could undermine Prime Minister Narendra Modi’s plans to make India a global manufacturing hub. Until now, the US was India trade sectors hit, with bilateral trade of $212 billion a year.
US tariffs effect India
The industries that will be most affected by the tariff exemptions India US are textiles, gems and jewellery, shrimp, and carpets, experts said.
India’s exports to the US will decline from $86.5 billion this year to about $50 billion by 2026, according to the Global Trade Research Initiative (GTRI), a New Delhi-based think tank.
Exports of textiles, gems and jewellery, shrimp, and carpets will be most affected, GTRI said, and could see their exports shrink by as much as 70 percent. The think tank estimated that hundreds of thousands of jobs were at stake.
“India might not be a major trading partner for the US, but the US is India’s largest trading partner,” he added. “Exports that will be impacted include textiles, garments, gems and jewellery, fisheries, leather, and crafts.”
Venu noted that the industries expected to be most affected by the tariff were highly labour intensive and comprised mostly small companies that will not be able to weather the India exports tariffs. “They are all likely to lose business to Vietnam, Bangladesh, Pakistan, and other East Asian economies,” he said.