Trade war: Tariffs notified, government hardens its position on no-go areas
Without being confrontational, govt sources made it clear that cultural sensitivities and farmers' interest will be paramount in talks with the US and indicated India's willingness to move ahead with talks, with the next round scheduled to begin on Aug 25. "We are engaged with American officials and securing our national interest is our primary objective. Govt is not going to come under pressure on areas that concern farmers and small businesses," said an official.
While there is bound to be some impact on India's exports, sources said that it may shave off around 0.2 percentage points from GDP this year and there may not be a significant impact over the economy.
The assessment is based on calculations that a significant part of India's exports to US - $20-25 billion out of overall exports of $86.5 billion last fiscal - was outside the ambit of tariffs notified through US President Donald Trump's executive order, issued early Friday (India time).
by Taboola
by Taboola
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In 2024-25, pharma exports were a little under $10 billion, while oil products added up to $4.2 billion and electronics were estimated at over $13 billion, made up largely of smartphones, according to official data.Apart from medicines, the exemptions include Active Pharmaceutical Ingredients, electronics and ICT products such as semiconductors, smartphones and computers and energy products.
The US tariffs will now be effective Aug 7 and the penalty for Russian arms and defence purchases was not part of the executive order issued by Trump, indicating he is seeking to use it as a threat to extract a deal to his liking from India. It also said that Indian shipments that are in transit before Aug 7 - and arrive at US ports before Oct 5 - will not face the additional tariff, providing some relief to exporters.Exporters are seeking sops from govt to tide over possible loss of orders, especially in sectors such as textiles, footwear and chemicals.
Commerce and industry minister Piyush Goyal is slated to hold consultations with exporters over the next few days.
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