Will take steps to protect India's interest against US tariffs: Goyal

Commerce and Industry Minister Piyush Goyal on Thursday said the government would take all necessary steps to safeguard the country’s interests and was engaged with all stakeholders to examine the implications of the 25 per cent tariffs announced on Indian imports by US President Donald Trump.

“The government is engaged with all stakeholders, including exporters and industry, for taking feedback of their assessment of the situation,” the minister said in Parliament. He said the welfare of farmers, workers, entrepreneurs, exporters, MSMEs and all sections of the industry was crucial for the government.

Trump’s announcement of tariffs amid negotiations for a bilateral trade agreement came as a shock for Indian officials. However, New Delhi was cautious to not jump the gun until clarity came on the penalties and associated duties. The US is India’s largest export destination, having $87.4 billion outbound shipments in 2024.

Experts believe the tariffs were unlikely to have much impact on the Indian economy as the domestic demand was the mainstay of growth. According to Barclays, the 25 per cent tariffs may impact the GDP growth by 30 basis points (0.3 per cent). However, key export sectors such as electronics and electrical equipment (around $15.4 billion), gems and jewellery (around $9 billion), textiles and garments (around $4.7 billion) and engineering goods, including machinery and auto components (around $17.6 billion), are likely to feel the pinch.

With tariffs on Vietnam and Indonesia being reduced to 19 per cent and 20 per cent, respectively, after both countries signed trade deals with the US, the demand for Indian products is likely to see a decline in the western nation.

The Barclays report said India’s third-largest export to the US—pharmaceutical goods ($8.7bn in 2024)—has been exempted for now. Trump, though, has indicated that these would be tariffed separately. The US is the largest buyer of India’s pharmaceutical goods, accounting for nearly 38 per cent of the country’s total exports in the field.