A Business Standard article reports that the U.S. administration has gone through with its plan to impose a 50% tariff on Indian goods. This is a combination of a 25% reciprocal tariff implemented on August 7 and an additional 25% levy linked to India’s oil purchases from Russia. Experts state that this poses the “most pressing external risk for India’s near-term growth and capital flows trajectory” and makes trade with the U.S. largely unfeasible for many sectors.
According to the Global Trade Research Initiative (GTRI), 66% of India’s exports to the U.S. will be hit by the 50% tariff. Sectors such as apparel, textiles, gems and jewelry, shrimp, carpets, and furniture will be the worst affected, with exports from these sectors potentially plunging by 70%, which could lead to a 43% overall decline in shipments to the U.S. and endanger hundreds of thousands of jobs. The article states that the textiles sector is losing ground to rivals from Vietnam and Bangladesh, while the seafood industry, particularly shrimps, faces significant risks due to the U.S. market absorbing nearly 40% of its exports.