Trump tariffs: 30–35% Indian exports to be costlier than competing goods in US market

A section of financial experts warned that the US’s imposition of an additional 50 per cent tariff on Indian goods could push India’s economy and corporate revenues into a downward spiral. They felt that the GST reforms under consideration by the Union government would likely fall short of addressing the impact of the US economic measures.

According to estimates from the Federation of India Export Organisation (FIEO), 30–35 per cent of Indian exports will be costlier in the US market than competing goods from other countries. India's exports, the FIEO said, have been in the range of USD 4,700 crore to USD 4,899 crore.

Exporters had expected the additional 25 per cent tariff imposed on August 25, on top of the 25 per cent added on August 7, would be averted at the last moment. The Trump administration increased the tariffs on Indian exports as a punitive measure to pressure New Delhi to cease purchasing oil from Russia.

With the new tariff rates coming into force, India's marine, ornament, textile, and furniture exporters could not compete with their rivals from Vietnam, Ecuador, and other countries with lower tariffs.

The repercussions of the higher duties on goods will be felt across the country. Exports of leather, carpets, ceramics, and chemicals will be disrupted. The diamond sector is already on the brink of collapse due to the low market demand in China. Of the total diamond exports, one-third was to the US.

Exporters suggested measures to tide over the crisis, including a one-year moratorium on loans and signing more free-trade agreements with the European Union and Gulf countries to boost exports. However, implementing these measures would take time.