US President Donald Trump has imposed a 26% reciprocal tariff on Indian imports, citing India's high tariffs on American goods. This move is expected to impact several Indian industries and exporters, though India remains better positioned compared to other nations facing steeper tariffs.

 India's apex exporters' body, FIEO, stated on Thursday that the 26 per cent tariffs or import duties announced by US President Donald Trump on India will undoubtedly affect domestic players.

However, India is much better placed than many other countries, said Ajay Sahai, Director General and CEO of the Federation of Indian Export Organisations (FIEO).

He expressed hope that the proposed bilateral trade agreement (BTA), currently being negotiated between the two countries, would be concluded at the earliest, as it would provide relief from these reciprocal tariffs.

Textiles, engineering goods, electronics, gems and jewellery are expected to be hit hardest by the new tariffs. Exporters in these industries may see reduced margins and competitiveness in the US market.

However, pharmaceuticals sector has been largely exempted from the tariffs due to its critical role in supplying generic medicines to the US. However, higher costs for US consumers may result from increased duties.

India has been accused of imposing high tariffs on American products, averaging 56%, including alleged currency manipulation and trade barriers. Trump described India as "very tough" and a "tariff king".

The US accounts for 18% of India's goods exports and has been its largest trading partner from 2021-24. India maintains a trade surplus with the US, which stood at $35.32 billion in 2023-24.

India is in a "lower band" of reciprocal tariffs compared to competitors like Vietnam (46%), Indonesia (32%), and Thailand (36%). This relative advantage may help mitigate some of the adverse effects.

A bilateral trade agreement (BTA) between India and the US is under negotiation. If concluded, it could provide relief from these tariffs and stabilize trade relations.

Analysts warn that failure to address the tariff issue could lead to prolonged economic impacts, including reduced exports and investor uncertainty.

The tariff announcement signals a shift in US trade policy under Trump, emphasizing reciprocity over concessions. While India's exporters face challenges, ongoing negotiations offer hope for resolution.

Agencies