Indian exporters in key sectors such as textiles, engineering goods, electronics, and gems & jewellery are expected to face significant challenges following the 26% tariff imposed by U.S. President Donald Trump. This move, part of a broader policy of reciprocal tariffs targeting multiple nations, is expected to erode profit margins and reduce the competitiveness of Indian goods in the U.S. market. Experts have highlighted various economic and market implications stemming from this decision.

Indian exporters in textiles, engineering goods, electronics, and gems & jewellery will be directly affected by increased costs and reduced demand in the U.S. market. Metals and oil markets have also reacted negatively, with sell-offs reported due to economic uncertainty.

The tariffs could lead to a decline in Indian exports, further straining India’s trade balance. Investors are shifting funds to safer assets such as gold and currencies like the Japanese yen and Swiss franc.

Indian stock markets experienced an initial downturn, with investors offloading riskier assets. This reflects broader concerns about economic pain and uncertainty.

While India faces steep tariffs, other countries like China and Vietnam have been hit harder. This presents India with a potential opportunity to strengthen its position in global trade for certain sectors like textiles.

India’s Department of Commerce is examining both the implications of these tariffs and potential opportunities arising from competitors being impacted more severely. Discussions around reducing tariffs on U.S. imports or concluding a bilateral trade agreement are ongoing.

Ajay Bagga described the tariffs as based on exaggerated calculations involving customs duties and alleged currency manipulation, calling it a shift from "America First" to "America Alone".

Ajay Sahai of the Federation of Indian Export Organisations noted that while the tariffs are damaging, India is comparatively better positioned than some competitors who face even higher levies.

The new tariffs represent a significant challenge for Indian exporters but also offer an opportunity for strategic adjustments in trade policy to mitigate long-term impacts.

ANI