Relief likely for Indian exporters amid new tariff rules

After US President Donald Trump’s decision to impose 26 per cent tariffs on Indian goods, economists believe Indian exporters will face relatively little trouble. India’s tariffs are the lowest among major emerging markets in Asia, except for the Philippines.

According to economic experts, this will have less impact on India as its economy is inward-looking compared to export-oriented countries like China, Japan, Vietnam and Sri Lanka. This is likely to have a significant impact on US inflation and global trade dynamics.

Bank of Baroda economics expert Sonal Badhan said Indian exporters would be least affected as tariffs on US imports are the lowest, except for the Philippines. Industry body Assocham said tariffs would lead to a major restructuring of global trade.

Assocham President Sanjay Nayar said India has been placed in the midst of a 26 per cent tariff rate in addition to the 10 per cent basic duty, which needs to be evaluated to know its actual impact.

Piramal Group chief economist Debopam Chaudhuri said inflow-dependent economies like India should focus on bank liquidity to keep domestic consumption intact.

Kunal Chaudhary, Tax Partner, EY India, said tariffs imposed on Indian goods exported to the US pose a dual challenge for the Indian manufacturing sector. However, lower tariffs compared to China, Thailand and Vietnam create favourable arbitrage opportunities for Indian exports.

Under the tariffs imposed, steel, aluminium and auto-related items imported from India will attract a 25 per cent tariff, while there will be no tariff on pharmaceuticals, semiconductors, copper or energy products.