India’s Exposure To Trump’s Potential 25% Tariff Depends On Competing Countries & Sectors: GTRI

New Delhi, July 30 (KNN) A potential imposition of 20–25 percent tariffs on Indian exports by the United States could have uneven effects across different sectors, according to Ajay Srivastava, Founder, Global Trade Research Initiative (GTRI). 

Speaking to ANI, Srivastava noted that the impact would depend on both the sectors targeted and the comparative tariff burdens faced by other countries.

The comment comes in response to US President Donald Trump's statement earlier this week, where he said the ongoing India-US trade deal was ‘working out very well’ but hinted at imposing tariffs in the range of 20–25 percent on India. 

The announcement is expected around August 1, in line with the administration's self-imposed deadline for the rollout of such tariffs.

Srivastava said the real picture would become clear only after the full list of affected countries and sectors is made public. 

“If the US is imposing, say, a 40 percent tariff on another country, then a 25 percent tariff on India may actually be relatively favourable,” he explained.

Discussing sector-wise implications, he pointed out that pharmaceuticals, one of India’s top exports to the US, may remain resilient. 

“European exporters face a 15 percent duty, but they primarily export expensive, high-end proprietary medicines. Indian exports largely consist of generic medicines, where a 25 percent tariff is unlikely to significantly dent competitiveness,” Srivastava said.

In the case of smartphones—especially iPhones—Srivastava noted that India and China are the primary suppliers to the US. If China faces a 30 percent duty and India is subjected to 25 percent, the competitive balance may remain unchanged. 

Similarly, petroleum product exports, worth nearly USD 4 billion, currently face no US tariffs, offering some reprieve for that segment.

On the broader contours of the India-US trade deal, Srivastava said that India has already offered tariff concessions on nearly all industrial products, which account for 95 percent of US exports to India. 

However, he stressed that India’s agriculture and dairy sectors remain politically sensitive and are unlikely to be opened for greater access.

This, he argued, presents a dilemma for Washington. “If the US accepts a trade deal that excludes agriculture, it could set a precedent. Countries like Japan or those in the European Union—who are themselves highly protective of agriculture—might then demand similar treatment,” he said, suggesting this may be one of the reasons behind delays in finalising a bilateral agreement.

Srivastava also rejected comparisons between the India-UK Free Trade Agreement and the ongoing India-US negotiations. “The India-UK FTA involved exhaustive negotiations across 26 subjects. The same depth of discussion hasn’t taken place with the US,” he added.

(KNN Bureau)