India Reacts to Trump's Tariff Hike on US-Bound Exports
U.S. President Donald Trump has imposed a 25% tariff on goods imported from India, effective August 1, escalating trade tensions between the two nations. This decision casts doubt on the prospect of a limited trade agreement that had been under discussion for months. Here's a breakdown of the reactions from key figures:
Expert Opinions on the Tariff Implications
Madhavi Arora, Economist, Emkay Global:
"While the negotiations seem to have broken down, we don't think the trade deal haggling between the two nations is over yet. We see it more from the lens of geopolitics than purely economics and see both sides striving to get the deal done, even as the power equations may change a bit in U.S. favour."
Ranen Banerjee, Partner of Economic Advisory, PwC India:
"Higher tariffs for India compared to countries it competes with, for exports to the U.S., are going to be challenging. However, the expectation is that the trade deal is likely to be finalised shortly and hence the period of applicability of these higher tariffs could be short."
Nilesh Shah, MD Kotak Mahindra AMC:
"Despite the unpredictable policy making of the U.S., the market was expecting a tariff deal to work out as longer-term U.S.-India strategic interests are aligned. Markets will hope for a 'TACO' trade if better senses prevail. China is defying U.S./UN sanctions on Iran oil, Myanmar and Russia trade and North Korea support. Size and the competitiveness of the economy has its advantages. I hope and pray that this unilateral imposition should accelerate Indian policy making to be growth supportive. Our biggest deterrence continues to remain GDP size and competitiveness."
Agneshwar Sen, Trade Policy Leader, EY India:
"The decision to raise the U.S. tariff to 25% on Indian exports is an unfortunate development, particularly given the strong strategic partnership that has been steadily built between India and the USA in recent years. However, it’s important to note that both countries remain positively engaged in active negotiations with the U.S. team expected in India later in August to finalize a comprehensive trade agreement."
Kirit Bhansali, Chairman, Gem and Jewellery Export Promotion Council India:
"This is a deeply concerning development. The Indian gem and jewellery sector, in particular, stands to be severely impacted. The United States is our single largest market, accounting for over $10 billion in exports - nearly 30% of our industry's total global trade. A blanket tariff of this magnitude will place immense pressure on every part of the value chain."