US tariffs to impact $8.1 bn of Indian exports, overall economic effect manageable: PHDCCI
Analysis indicates that there will be an estimated impact of only 1.87 per cent on India's total global merchandise exports and a negligible 0.19 per cent on India's GDP as a result of the 25 per cent tariff announced by the US on India.
The study added that the engineering goods could potentially be impacted worth USD 1.8 billion, while electronic goods (USD 1.4 billion), pharmaceuticals (USD 986 million), gems and jewelery (USD 932 million) and readymade garments will be impacted worth USD 500 million.
In a latest development, on August 5, US President Donald Trump once again announced that he would increase the tariff charged on imports from India from the current rate of 25 per cent "very substantially" over the next 24 hours due to New Delhi's continued purchases of Russian oil.
Trump had said on Monday that the United States will "substantially raise" the tariff paid by India for buying "massive amounts of Russian Oil", stating that much of the oil purchased from Moscow is being sold in the open market "for big profits."
Trump's announcement, made on his social media platform Truth Social, came days after he announced a 25 per cent reciprocal tariff on India and an unspecified penalty for importing oil from Russia.
Hemant Jain, President, PHDCCI, said, "The tariff challenge accelerates India's need for export sophistication and geographic diversification. Our strategy framework provides a roadmap for converting this disruption into an opportunity for long-term competitiveness enhancement."
"While the 25% US tariff presents challenges, India's robust domestic demand and diversified economy provide resilience. Our analysis shows the impact, though significant in absolute terms, remains manageable at the macro level. This presents an opportunity for Indian businesses to accelerate market diversification and value addition strategies," said Ranjeet Mehta, CEO & SG, PHDCCI.
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