As the April 2 deadline approaches for US President Donald Trump’s reciprocal tariffs, stakeholders are uncertain about their potential impact on Indian businesses. These tariffs aim to address the significant trade deficit the US faces, but the specifics of their implementation—whether at the product, sector, or country level—remain unclear.
From 2021-22 to 2023-24, the US has been India’s largest trading partner, accounting for about 18% of India’s total goods exports, 6.22% of imports, and 10.73% of bilateral trade. India exports a range of products across 30 sectors to the US, including 6 agricultural and 24 industrial categories. The way the tariffs are structured could determine the extent of the damage.
If sector-level tariffs are enforced, certain products will face significant price hikes:
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Alcohol, wines, and spirits: Exports worth $19.2 million could be impacted by a steep 122.10% tariff increase.
Dairy products: A tariff differential of 38.23% on $181.49 million of trade could make products like ghee, butter, and milk powder costlier and less competitive.
Fish, meat, and processed seafood: $2.58 billion in exports will face a 27.83% tariff, harming shrimp exports.
Live animals and animal products: A 27.75% tariff could affect $10.31 million in exports.
Processed food, sugar, and cocoa: $1.03 billion in exports could see a 24.99% tariff hike, increasing prices for Indian snacks and confectionery.
Footwear: A 15.56% tariff would raise costs in this sector.
Diamonds, gold, and silver: The 13.32% tariff increase on $11.88 billion in exports would raise jewelry prices.
Industrial goods: The pharmaceutical sector would face a 10.90% tariff, making generic medicines and specialty drugs more expensive.
Edible oils: A 10.67% tariff would increase costs for coconut and mustard oil.
However, no new tariffs are expected for sectors like ores, minerals, petroleum, and garments.
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