Trump's additional 25% tariff may affect India's 40-50% exports to US: GTRI's Ajay Srivastava breaks down impact

Mint

2 days ago

The tariffs recently announced by the US could have a severe impact on India's exports to the US. The tariffs are expected to make Indian goods far more expensive in the US, with the potential to cut America-bound exports by 40–50 per cent, think tank Global Trade Research Initiative (GTRI) said on Wednesday.
The White House said earlier that the measures are imposed in response to India's continued purchase of Russian oil, as reported by PTI.
On August 6, Washington announced an additional 25 per cent tariff on all Indian imports, on top of an existing 25 per cent duty, taking the total to 50 per cent from August 27. These new 'reciprocal' tariffs come with their own set of consequences: Economic disadvantage: This move places India among the "most heavily" taxed US trading partners, putting it at a disadvantage compared to rivals such as China, Vietnam, and Bangladesh, which face lower tariffs. Broad impact: The tariff threatens most of India's $86.5 billion in annual exports to America, from textiles to machinery.
Adding to the consequences, Global Trade Research Initiative (GTRI) Founder Ajay Srivastava said that China bought $62.6 billion of Russian oil in 2024, which is more than India's $52.7 billion, yet the country does not face any such penalties.
Washington avoids targeting Beijing because of China's dominance over critical minerals such as gallium, germanium, rare earths, and graphite, which are crucial for US defence and technology, he said.
Srivastava also added that the US has also overlooked its allies' trade with Russia such as the European Union (EU) which imported $39.1 billion of Russian goods last year, including $25.2 billion in oil.
The US itself purchased USD 3.3 billion in strategic materials from Russia, the news agency said. "The tariffs are expected to make Indian goods far costlier in the US, with potential to cut US bound exports by 40–50 per cent," he said.