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Business EconomyPosted at: Apr 3 2025 4:20PM


India stands less impacted by Trump tariffs than rivals, says industry body ASSOCHAM

New Delhi, Apr 3 (UNI) The Reciprocal Tariffs unveiled by the US President Donald Trump will result in major realignment in global trade, Indian industry has reacted cautiously saying the real impact of the measures/announcements needs to be assessed.
Tariffs unveiled by President Trump last night would bring a major realignment in global trade and manufacturing value chains. India has been placed somewhere in the middle of the tariff rates at 26 per cent in addition to 10% baseline duties, which needs to be assessed for real impact, Sanjay Nayar, President of industry association ASSOCHAM said in a statement.
''Net-net, it appears India's export competitiveness to the US market stands far less impacted on a relative basis. Yet our industry should make concerted efforts to increase export efficiency and value addition, to mitigate impact of these tariffs'' he said.
The Government also said that the Department of Commerce is carefully examining the implications of the various measures / announcements made by the President of the USA. Keeping in view the vision of Viksit Bharat, the Department is engaged with all stakeholders, including Indian industry and exporters, taking feedback of their assessment of the tariffs and assessing the situation.
ASSOCHAM further observed said since most of American trading partners have planned to levy reciprocal tariffs, no country gets a winning advantage while consumers may end up paying more leading to inflationary pressures. “While we wait and watch for global reaction, for India the way forward could be a quick preferential trade deal keeping in view that President Trump still respects leadership of PM Modi,” Nayar said adding that India Inc would work closely with the government towards this matter.
Indian gem & jewellery industry also said that, like the rest of the world, it is trying to analyse the evolving global economic landscape due to the reciprocal tariff announcement by USA on countries worldwide.
The Gem & Jewellery Export Promotion Council (GJEPC) though understands the U.S. administration's intent to address trade and tariff imbalances through reciprocal tariffs, however urged the U.S. to uphold the spirit of the longstanding trade partnership between India and the United States, which has been built on mutual respect and shared economic interests.
The Trump administration’s announcement of a 26% reciprocal tariff on Indian gem and jewellery exports to the US would be a significant burden on Indian exporters and American consumers alike, GJEPC said.
While the tariff’s application to competing nations presents both challenges and opportunities, it is likely to significantly impact India’s diamond and jewellery sector—a cornerstone of its exports to the US. In the long term, we foresee a reshaping global supply chains but in short run, we anticipate challenges in sustaining India’s current export volume of USD 10 billion to the US market.
“We urge the Government of India to progress the Bilateral Trade Agreement between India and the US, as it would be crucial in navigating the tariff issues and securing long term interest of the sector. Additionally, GJEPC is actively engaging with stakeholders to address these risks and advocate for balanced solutions that ensure continued access to the U.S. market,” it added.
Harsh Bhuta, Partner at Bhuta Shah & Co LLP, said “The imposition of a 26% tariff on Indian imports by the Trump administration is an undeniable setback, particularly given recent diplomatic efforts by the Indian government to avert such measures through meaningful concessions. While India’s gross exports to the U.S. are relatively low compared to other emerging market peers—as Goldman Sachs points out—and Fitch rightly notes India’s limited reliance on external demand, this move still sends ripples through key export-oriented sectors such as textiles, Jewellery and engineering goods.”
These industries may face immediate margin pressure and disruptions in supply chains. However, this development could also serve as a catalyst for Indian businesses to enhance value addition, move up the export value chain, and invest in innovation. Over time, the shock may foster greater internal resilience and sharpen the country’s competitive edge. Strategically, this may also accelerate India’s push for self-reliance and bolster its resolve to finalize a comprehensive trade pact with the U.S. in the near term, he added.
Manish Jain, Chief Strategy Officer & Director, Mirae Asset Capital Markets, said India will have 26% tariffs on all the products except certain items which are exempted (copper, pharma, semiconductor, lumber, gold, energy and other certain minerals). India is already doing Bilateral Trade talks with the US which could potentially lower the tariffs in near future, but timeline is uncertain.
In response to the significant increase in tariffs, other countries are likely to announce reciprocal tariffs on US imports. Given the significant increase in tariffs on major trade partners and expected retaliation by other countries, inflation will increase which will lead to the global economic slowdown. This will even increase the recession probability in the US. Also in an inflationary environment, the Fed might delay the rate cuts, Jain added.
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