India braces for hit to $64 billion US exports amid rising tensions with Washington
NEW DELHI (Reuters) -India expects to lose a competitive advantage in about $64 billion worth ofgoods exported to the U.S. due to President Donald Trump's 25% tariff and an assumed 10% penalty for buying Russian oil, four sources told Reuters citing an internal assessment report by the government.
India faces its most serious diplomatic crisis with the United States in years after Trump imposed the highest tariffs among Asian peers on goods imported from India, even before anypenalty.
A relatively low share of exports in India's $4 trillion economy is seen limiting the direct impact on growth to 40 basis points. The Reserve Bank of India left its GDP growth forecast for the current April-March financial year unchanged at 6.5% and held rates steady on Wednesday despite the uncertainty created by tariff hikes.
The trade impact estimates wereprepared by the Indian government after Trump announced the unexpectedly high tariff for Indian goods, along with the unspecified penalty. The Indian government in its assessment report has assumed a 10% penalty for buying Russian oil, taking the tariff to 35%, the four Indian government sources told Reuters.
They declined to be identified because they were not authorised to speak to media.
India's trade ministry did not immediately respond to a request for comment.
Trump said on Wednesday his administration will decide on the penalty for buying Russian oil post the outcome of U.S. efforts to seek a last minute breakthrough in the Ukraine war.
U.S. envoy Steve Witkoff is in Moscow, two days before the expiry of a deadline set by Trump for Russia to agree to peace or face new sanctions.
The impact of the tariff and possible penalty will be on nearly $64 billion worth of India's exports to U.S that account for about 80% of total exports to the country, and it will lead to 'potential export losses' due to price disadvantages, the four sources said.
The internal assessment report is the government's initial estimate and will change as the quantum of tariff by Trump becomes clear, all four sources said.
India exported goods estimated at around $81 billion in 2024 to the U.S., including garments, pharmaceuticals, gems and jewellery, and petrochemicals, according to government data. The South Asian nation's goods exports to U.S. constituted 2% of GDP in 2024.
Its total goods exports globally were at $443 billion in 2024.
The proposed tariffs on India's high-value exports face "erosion of price competitiveness encountering intensified rivalry from countries subject to lower duties," two sources said citing the internal assessment.
RUSSIA IN FOCUS
India's National Security Adviser Ajit Doval is in Russia on a scheduled visit and is expected to discuss India's purchases of Russian oil in the wake of Trump's pressure on India to stop buying Russian crude, according to a government source.
His visit will be followed by Foreign Minister Subrahmanyam Jaishankar in the weeks to come, amid India's attempts to placate Washington's concerns while balancing historical ties with Moscow.
Doval is expected to discuss India's defence collaboration with Russia, including getting faster access to the pending units of S400 air defence system and President Vladimir Putin's visit to India.
India's foreign ministry did not immediately respond to a request for comment.
(Reporting by Nikunj Ohri Sarita Chaganti Singh Shivam Patel in New Delhi; Editing by Aftab Ahmed and Raju Gopalakrishnan)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
25 minutes ago
- The Star
Zelenskiy discussed with IMF head new financial assistance for Ukraine
(Reuters) -Ukraine's President Volodymyr Zelenskiy said on Thursday he had discussed a new International Monetary Fund financial assistance programme for Ukraine with the Fund's Managing Director Kristalina Georgieva. "We discussed a new programme of financial assistance that will strengthen Ukrainians now and in the post-war period," Zelenskiy wrote on the Telegram messaging app of the phone meeting. "We are prepared to carry out the necessary steps quickly. The government is already working on this." Ukraine's current $15.5-billion programme with the IMF expires in 2027. Officials say part of that programme deals with reconstruction and Ukraine's needs have changed as the war drags on. Moscow invaded its smaller neighbour in February 2022. Analysts say Ukraine's financing gap will widen significantly next year if Russia keeps up its intense attacks across the country and the government fails to act on demands for reform from foreign lenders. (Reporting by Ron Popeski and Olena Harmash; Editing by Chris Reese and Rod Nickel)
Daily Express
an hour ago
- Daily Express
Trump demands resignation of Malaysian-born Intel CEO over China ties
Trump demands resignation of Malaysian-born Intel CEO over China ties WASHINGTON: President Donald Trump demanded today that the new boss of US chip maker Intel resign 'immediately', after a Republican senator raised national security concerns over his links to firms in China. 'The CEO of INTEL is highly CONFLICTED and must resign, immediately. There is no other solution to this problem,' Trump posted on his Truth Social platform, a day after senator Tom Cotton said he had written to Intel questioning ties between CEO Lip-Bu Tan (pic) and Chinese firms. Advertisement Tan 'reportedly controls dozens of Chinese companies and has a stake in hundreds of Chinese advanced-manufacturing and chip firms. At least eight of these companies reportedly have ties to the Chinese People's Liberation Army', Cotton wrote in his letter, a copy of which he posted on his website. Cotton also noted Tan's role as the previous head of Cadence Design Systems, which he said recently 'pleaded guilty to illegally selling its products to a Chinese military university and transferring its technology to an associated Chinese semiconductor company without obtaining licenses.' SPONSORED CONTENT Tan was head of the company at that time, Cotton said. The Malaysian-born tech industry veteran took the helm at struggling Intel in March, announcing layoffs as White House tariffs and export restrictions muddied the market. Advertisement He has said it 'won't be easy' to overcome challenges faced by the company. Intel is one of Silicon Valley's most iconic companies, but its fortunes have been dwarfed by Asian powerhouses TSMC and Samsung, which dominate the made-to-order semiconductor business. Advertisement The company was also caught by surprise with the emergence of Nvidia as the world's preeminent AI chip provider. Intel's niche has been in chips used in traditional computing processes, steadily being eclipsed by the AI revolution. - AFP
New Straits Times
an hour ago
- New Straits Times
India presses for global 'code of conduct' over pilot poaching
NEW DELHI: India wants countries to agree a new code of conduct on hiring each other's airline staff after raising concerns that its fast-growing aviation system is being stifled by the poaching of Indian pilots and cabin crew without adequate notice. India, one of the world's fastest-growing aviation markets, is wrestling with a shortage of experienced pilots, denting Prime Minister Narendra Modi's aspiration of developing a job-creating global aviation hub. The recent fatal crash of an Air India jetliner has sparked tighter scrutiny of the sector. But foreign airlines are repeatedly hiring skilled staff from Indian airlines, "adversely impacting India's ability to develop its civil aviation sector in an orderly manner," India said in an August 1 working paper submitted to the UN's aviation agency, the International Civil Aviation Organisation. "Airlines from other (countries) tend to recruit experienced pilots, engineers, technicians, and cabin crew from Indian carriers, preventing India's civil aviation sector from achieving planned and orderly growth," India wrote in the paper, without identifying any foreign airline by name. "This practice creates a vicious cycle where Indian carriers are forced to continuously recruit and train replacement personnel by diverting resources from expansion activities and operational improvements." The paper was released on the ICAO website ahead of its triennial assembly. It has not previously been reported. India's Civil Aviation Ministry was not immediately available for comment. India's government said in April the country would need 30,000 pilots over the next 15–20 years, up from the current 6,000–7,000, as airlines collectively had more than 1,700 aircraft on order. India's domestic aviation sector is led by IndiGo and Air India, while all major international airlines from Emirates to British Airways to Lufthansa operate regular flights. In 2023, Air India exchanged barbs with Akasa Air over the poaching of pilots domestically. The working paper asks for the creation of a code of conduct on the movement of skilled aviation workers among ICAO's member countries. It doesn't specify how the code of conduct would work. "These challenges cause economic losses that affect Indian carriers' ability to compete in international markets ... and achieve its ambitious target of 300 million domestic passengers by 2030," the paper said. ICAO, which seeks to use consensus to set standards on everything from runways to seat belts, was created after the United States invited more than 50 allies to agree in 1944 to a common air navigation system.
