India faces $7bn export loss over tariffs
US President Donald Trump’s threat to impose reciprocal tariffs from early April is feeding anxiety in India’s export sectors from autos to agriculture, with Citi Research analysts estimating potential losses at about $7 billion a year.
Government officials waiting to learn how the tariffs will be calculated before they can assess their full economic impact, say they are readying plans to counter them as well as working on a proposal for a US trade deal to cut tariffs and grow two-way trade.
The most vulnerable are chemicals, metal products, and jewellery, followed by automobiles, pharmaceuticals, and food products, Citi analysts say.
India’s merchandise exports to the United States, estimated at nearly $74 billion in 2024, included pearls, gems, and jewellery worth $8.5 billion, pharmaceuticals worth $8 billion, and petrochemicals amounting to about $4 billion.
At an aggregate level, India charged a weighted average tariff of about 11% in 2023, around 8.2 percentage points higher than US tariffs on Indian exports, Citi estimates show.
US manufacturing exports to India, valued at nearly $42 billion in 2024, face significantly higher tariffs, ranging from 7% on wood products and machinery to as much as 15% to 20% on footwear and transport equipment, and nearly 68% on food items.
In a fact sheet last week, the White House said the US’s average applied Most Favored Nation (MFN) tariff on farm goods was 5% compared to India’s 39%.
Will boost US trade to $500 bn, says Goyal
India and the US are committed to increasing bilateral trade to USD 500 billion and negotiating a ‘strong’ trade agreement within 6-8 months, Commerce and Industry
Minister Piyush Goyal said on Tuesday. Goyal said once his US counterpart takes charge, both countries would discuss the contours of the pact.
