$65 Billion of Indian Exports at Risk

India could see $65 billion worth of merchandise exports to the United States impacted if US President Donald Trump’s proposed 50 percent tariff on Indian goods remains in place. This estimate, shared by a senior government official, underscores the potential challenge for several key industries.

Scope for Relief Through Trade Deal

The official highlighted that the impact might be reduced if New Delhi and Washington reach a trade agreement, which could lower the tariff rate on India. Negotiations and diplomatic engagement will be crucial in limiting the damage to India’s export sector.

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Sectors Likely to be Hit Hardest

According to the government’s rough forecast, sectors such as textiles, gems and jewellery, and marine products are expected to be the most affected. These industries, many of which are labour-intensive, could face severe pressure from reduced competitiveness in the US market.

Need for Support Measures

“Some hand-holding will be required for certain labour-intensive exports,” the official noted, suggesting that the government may consider measures like easing bank credit to support exporters. While an initial 25 percent tariff could have been partially absorbed, the doubling to 50 percent has created a far more challenging scenario.

India’s Current Trade with the US

In FY25, India exported goods worth $86.51 billion to the US, making it a critical market for Indian exporters. Any prolonged tariff hike could significantly dent this trade volume and affect related employment and supply chains.

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