US Tariffs on India: A Manageable Challenge or Economic Opportunity?

The recent reciprocal tariffs announced by the US are set to affect approximately USD 8.1 billion worth of Indian exports. According to an analysis by the industry body PHDCCI, the impact on India's economy would be minimal, influencing only 1.87% of India's total global merchandise exports and having a negligible 0.19% effect on its GDP.

The analysis highlighted that sectors including engineering goods (USD 1.8 billion), electronics (USD 1.4 billion), pharmaceuticals (USD 986 million), gems and jewelry (USD 932 million), and readymade garments (USD 500 million) would be most affected. President Donald Trump announced a further increase in tariffs on Indian imports due to India's continued purchase of Russian oil.

Industry leaders emphasize that this tariff scenario underscores the need for India to enhance its export sophistication and diversify geographically. Despite the challenges, India's strong domestic demand and economic diversification afford resilience. PHDCCI's strategic framework suggests Indian businesses view this as an opportunity to innovate and expand into new markets for sustained competitiveness.

(With inputs from agencies.)