 "Garment workers stitch shirts at a textile factory in Hindupur town in the southern state of Andhra Pradesh, India, February 9, 2022. (Photo: Samuel Rajkumar/Reuters)")
The Narendra Modi government has told the parliament that Indian exports to the tune of $48.2 billion could be affected by American tariffs.
US President Donald Trump has slapped 50 per cent tariffs on India — 25 per cent on July 31 as part of the rollout of tariffs for over 60 countries and additional 25 per cent on August 6 as a punishment for the purchase of Russian oil.
In an answer to Congress MP Adoor Prakash’s question, Jitin Prasada, the Union Minister of State for Commerce and Industry, told the Lok Sabha that the government has estimated that around $48.2 billion of Indian exports to the United States, as per the trade value of 2024, will be subjected to tariffs.
As Indian exports to the United States last were worth around $80 billion, the exposure of $48.2 billion-worth goods would mean that around 60 per cent of all exports would be exposed to tariffs. The government’s estimate is therefore in line with independent estimates that had previously been reported.
Previously, Bloomberg Economics had projected that Trump’s 50 per cent tariffs could affect 60 per cent of India’s US exports and lower the GDP growth for the financial year 2025-26 by 1 per cent.
The United States is the largest export destination for Indian goods, accounting for around 17-18 per cent of all Indian exports. India also has a trade surplus with the United States, particularly in pharmaceuticals, textiles, and engineering goods.
While Prasada did not answer about retaliatory measures, he said, “Government is committed to secure and advance country’s national interest and protect the welfare of our farmers, workers, entrepreneurs, exporters, MSMEs and all sections of industry and take all necessary steps to help mitigate impact on trade including through appropriate export promotion and trade diversification measures.”
Impact Shorts
More ShortsSeparately, the government has proposed changes to the goods and services tax (GST) regime to make up for the losses from tariffs to some extent and spur consumption-led growth.