New Delhi [India], August 4 (ANI): Indian exports to the US are projected to say no by almost 30 per cent, from USD 86.5 billion in 2024-25 to about USD 60.6 billion in 2025-26, as the brand new 25 per cent reciprocal tariffs come into impact, in accordance with Global Trade Research Initiative (GTRI).
According to a GTRI report on Monday, labour-intensive sectors corresponding to clothes, textiles, shrimp, jewelry, and engineering items are among the many worst affected.
The tariffs put India at a critical drawback in comparison with regional rivals like Vietnam, Bangladesh, and Mexico, who face decrease or zero duties, it famous.
To cushion the blow and future-proof its commerce technique, the GTRI has beneficial a focused five-point motion plan that features monetary reduction for MSMEs, real-time commerce intelligence, smarter use of FTAs, tourism reform, and streamlined onboarding for brand spanking new exporters.
India faces a 25 per cent country-specific tariff and an additional unspecified ‘penalty’ on its exports to the US–one of the best amongst Asian exporters, second solely to China at 30 per cent. In distinction, opponents corresponding to Vietnam (20 per cent), Bangladesh (18 per cent), Indonesia, Malaysia, and the Philippines (19 per cent), and Japan and South Korea (15 per cent) take pleasure in decrease charges.
This places Indian exports at a transparent drawback throughout most sectors, barring a number of exemptions, GTRI reiterated.
The new US tariff regime excludes prescribed drugs, vitality merchandise, vital minerals, and semiconductors.
‘But outdoors these, Indian items are underneath strain,’ it stated.
Knitted and woven clothes now face steep US tariffs of 38.9 per cent and 35.3 per cent, a lot greater than the charges for Vietnam, Bangladesh, and Cambodia.
Made-up textiles like towels and bedsheets, which earn India USD 3 billion in exports (with almost half going to the US), now face a 34 per cent obligation. ‘This offers a transparent benefit to opponents like Pakistan and Vietnam,’ GTRI asserted.
India’s USD 2 billion shrimp exports, which make up 32 per cent of world provide, will now face a 25 per cent US tariff.
‘This wipes out their worth edge over rivals like Canada and Chile, who profit from free commerce offers with the US,’ GTRI stated.
Mechanical gold jewelry exports to the US are more likely to be hit the toughest.
India’s USD 4.7 billion in metallic exports–mainly metal, aluminium, and copper, in accordance with GTRI, will even endure. GTRI argued that the upper value is predicted to curb demand from US infrastructure and vitality consumers.
Trump’s 27.1 per cent tariff on India’s USD 10 billion diamond and jewelry exports–40 per cent of its international commerce within the sector–delivers a heavy blow to the sector for India, in accordance with GTRI.
‘With worth addition barely 3-4 per cent, margins are wafer-thin, and such duties can flip exports immediately unviable. Mechanical gold jewelry, price USD 3.6 billion, is ready to be hit hardest,’ the report learn.
In diamonds, the affect is much more advanced.
India exports USD 4.9 billion price of reduce and polished diamonds to the US, however US imports present solely USD 2.5 billion. Buyers choose a fraction and return the remaining.
‘A excessive upfront tariff disrupts this mannequin, elevating prices on even unsold stones, and will sharply scale back demand,’ GTRI stated.
Petroleum exports are nonetheless tariff-free, however India’s use of Russian crude ‘may invite penalties’, GTRI stated, referring to President Trump’s unhappiness round Indian crude oil imports from Russia.
Faced with these challenges, can India diversify its commerce to different international locations? According to GTRI, exporting extra to different international locations to make up for losses within the US market will not be straightforward.
‘Global commerce is shifting away from openness towards tighter controls, pushed by politics, safety, and local weather guidelines. For instance, the EU–which imported USD 75.7 billion price of Indian goods–will start making use of a carbon tax in January, making Indian metal and aluminium much less aggressive,’ GTRI supplemented.
Last Wednesday, President Donald Trump introduced the imposition of 25 per cent tariffs on Indian items plus an unspecified penalty, at the same time as there have been hopes of an interim India-US commerce deal that might have in any other case helped keep away from elevated tariffs.
India and the US initiated talks for a simply, balanced, and mutually useful Bilateral Trade Agreement (BTA) in March this yr, aiming to finish the primary stage of the Agreement by October-November 2025.
On April 2, 2025, President Trump signed an government order for reciprocal tariffs on varied commerce companions, imposing various tariffs within the vary of 10-50 per cent.
He subsequently saved the tariffs in abeyance for 90 days, whereas imposing a ten per cent baseline tariff. The deadline was to finish on July 9, and the US administration later pushed it to August 1.
US President Donald Trump had imposed reciprocal tariffs on dozens of nations with which the US has a commerce deficit. Since assuming workplace for his second time period, President Trump has reiterated his stance on tariff reciprocity, emphasising that the United States will match tariffs imposed by different international locations, together with India, to ‘guarantee honest commerce’.
On Thursday night, Commerce and Industry Minister Piyush Goyal made an announcement in each homes of the Parliament, stating that the federal government is analyzing the affect of tariffs and can take all mandatory steps to safeguard the nationwide curiosity. (ANI)