New Delhi:
As US President Donald Trump’s April 2 deadline to impose reciprocal tariffs approaches, stakeholders are in the dark about their implementation as Washington moves towards negotiations of a fresh trade agreement with India.
How the reciprocal tariffs, meant to remedy the massive trade deficit US faces, will impact Indian businesses will depend on whether they are implemented at the product level, sector level or country level. It is pertinent to note that from 2021-22 to 2023-24, the US was the largest trading partner of India. The US accounts for about 18 per cent of India’s total goods exports, 6.22 per cent in imports, and 10.73 per cent in bilateral trade.
India’s exports to the US span 30 sectors, with six in agriculture and 24 in industry. Should sector-level tariffs be implemented, here is how the following products will be impacted:
Alcohol, wines, and spirits: The highest tariff hike at 122.10 per cent will come into effect, though exports are only $19.20 million.
Dairy products: Trade worth $181.49 million will be severely affected by a 38.23 per cent tariff differential, making ghee, butter, and milk powder costlier, reducing their market share.
Fish, meat and processed seafood: $2.58 billion in exports will face a 27.83 per cent tariff differential. Shrimp, a major export, will become significantly less competitive.
Live animals and animal products: A 27.75 per cent tariff differential on USD 10.31 million in exports.
Processed food, sugar and cocoa: Exports worth $1.03 billion will also struggle with a 24.99 per cent tariff increase, making Indian snacks and confectionery expensive in the US.
Footwear: The sector faces a high 15.56 per cent tariff differential.
Diamonds, gold and silver: With $11.88 billion in exports, the sector will attract a 13.32 per cent tariff hike, raising jewellery prices and reducing competitiveness.
Industrial Goods: The pharmaceutical sector, faces a 10.90 per cent tariff differential, increasing costs for generic medicines and speciality drugs.
Edible oils: Sector faces a 10.67 per cent tariff, increasing costs for coconut and mustard oil.
Ores, minerals, petroleum, and garments: no new tariffs will apply in these sectors.