Impact of Recent US Tariffs on India's Economy: A Closer Look

The United States recently imposed a steep 50% tariff on shipments from India, a move that is projected to have a limited but notable impact on the country's economic growth. Former Commerce and Home Secretary G K Pillai commented on Thursday that if exporters fail to find alternative markets, the tariffs could reduce growth by approximately 50 basis points.

Pillai described the tariffs as discriminatory, pointing out that while the US targets India, it has not penalized other countries like China and many European nations that also trade with Russia. The sectors expected to bear the brunt of the tariffs include textiles, gems, and jewellery, along with seafood exports, chemicals, and more.

In the wake of these tariffs, Indian companies may face reduced profitability over the next several months, possibly leading to layoffs. However, governmental measures to support affected sectors could mitigate these issues. The finance ministry emphasized the importance of ongoing trade negotiations with key partners, including the US and EU, to navigate these economic challenges.

(With inputs from agencies.)