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The recent move by the U.S. President to raise tariffs on Indian goods to 50 per cent, on top of the existing Most Favoured Nation (MFN) import duties, is set to hit several Indian export sectors hard, according to a report by the Global Trade Research Initiative (GTRI).
The report highlighted that while the impact will vary across sectors, some of India's largest export categories may see a sharp fall in shipments to the U.S. GTRI stated "This decision makes India one of the most heavily taxed U.S. trading partners, worse off than China (30 per cent) or Vietnam (20 per cent), and on par with Brazil". Very high impact sectors include Shrimps, Organic Chemical, Carpets, Apparel, Diamond and Gold Jewellery. The report also stated that exports in certain sectors could drop by 50-70 per cent. Shrimps, which brought in USD 2 billion from the U.S. in FY2025 and account for 9.52 per cent of U.S. shrimp imports, will now face a 50 per cent tariff along with existing antidumping and countervailing duties of about 10 per cent. Competitors like Canada and Chile enjoy much lower tariffs. Organic chemicals worth USD 2.7 billion exported from India will now face a total tariff of 54 per cent, compared to just 15 per cent for Ireland and 39 per cent for Switzerland. Carpets, where India holds the largest U.S. market share at 35.48 per cent with exports of USD 1.2 billion, will be hit by a 52.9 per cent duty, making them less competitive against Turkey and China. The apparel sector will also suffer heavily. Knitted apparel exports worth USD 2.7 billion will face a 63.9 per cent tariff, while woven apparel worth the same value will attract 60.3 per cent duty. Made-ups, including bed linen and towels, will face a 59 per cent duty on USD 3 billion worth of exports. Diamonds, gold, and jewellery, India's top export sector to the U.S. at USD 10 billion, will now be taxed at 52.1 per cent. Machinery and mechanical appliances worth USD 6.7 billion will see a 51.3 per cent duty, and furniture worth USD 1.1 billion will attract 52.3 per cent. High impacting sectors, Steel, aluminium, and copper exports worth USD 4.7 billion will face a 51.7 per cent tariff, while auto parts worth USD 2.6 billion will be taxed at 26 per cent. Some key sectors remain unaffected. as they are exempted from 50 per cent duty. Pharmaceuticals worth USD 9.8 billion, smartphones worth USD 10.6 billion, and petroleum products worth USD 4.1 billion will continue to face zero or minimal tariffs, giving them a competitive edge. The report also warned that the high tariffs could significantly hurt India's market share in the U.S. for several sectors, especially those already facing strong competition from countries with lower or no tariffs. (ANI)
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