US Tariffs Hit India’s Telecom, Agriculture Sectors Hardest: EY

ENA Economy 2025-04-07 16:56:37 New Delhi, Apr 7 (KNN) India's telecom and agriculture sectors have emerged as the most severely impacted by US President Donald Trump's recent tariff policies, according to data shared in a new report by EY. The telecom sector has experienced a dramatic increase in tariffs from 0 per cent to 26 per cent effective April 9, 2025, affecting India's USD 6 billion telecom exports to the US. Despite this substantial hike, India maintains a competitive edge over China and Vietnam, which face even higher duties. The report suggests several potential remedies, including accelerating the Mission 500 initiative and expediting the Bilateral Trade Agreement (BTA) with the US. It also recommends that the Indian government extend the Production Linked Incentive (PLI) scheme beyond its current 2026 expiration date to bolster the sector's growth and resilience. In the agricultural sector, tariffs have jumped steeply from 4 per cent to 31 per cent, threatening USD 5.5 billion worth of Indian agricultural exports to the US. This significant increase presents a major challenge to the sector's competitiveness and growth trajectory. Nevertheless, the report emphasizes that India still retains certain competitive advantages in global trade compared to countries like China and Vietnam, though it lags behind nations such as Canada and Mexico that benefit from preferential tariff arrangements and consequently hold larger market shares. The auto components industry is facing similar pressures, with exports valued at USD 2.1 billion now subject to 25 per cent tariffs, up from the previous 2.5 per cent. This increase affects critical components including engines, transmissions, and powertrains. Unlike other sectors, the uniform application of the 25 per cent duty across all countries means India receives no particular advantage over competitors like China, prompting the report to advocate for concessional tariffs in future trade negotiations. The textile sector, with exports to the US worth USD 9.5 billion, now faces tariffs between 33 per cent and 36 per cent, representing an increase of approximately 27 per cent. However, India maintains a relative advantage as competing exporters such as China, Vietnam, and Bangladesh confront even higher tariff rates. The EY report concludes that while the increased US tariffs present significant challenges to India's export-oriented sectors, the country's manufacturing capabilities and strategic policy frameworks may help it maintain competitive positioning. Rapid progress on bilateral trade agreements and continued policy support will be essential to ensure sustained growth in these key sectors. (KNN Bureau) 41671 https://knnindia.co.in/news/newsdetails/economy/us-tariffs-hit-indias-telecom-agriculture-sectors-hardest-ey 2025-04-07 16:56:37 knnindia.co.in US Tariffs Hit India’s Telecom, Agriculture Sectors Hardest: EY