India-US tariff tussle: CTI suggests exploring alternative markets; 'traders are in a dilemma'

Time of India

3 days ago

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The Chamber of Trade and Industry (CTI) has voiced concerns over the US's latest decision to impose an additional 25% tariff on Indian goods, taking the total duty to 50%. The body warned of serious consequences for India's export driven businesses.
CTI chairman Brijesh Goyal wrote to PM Narendra Modi, calling for immediate and strategic action, including imposing retaliatory tariffs on US imports to India.
In his letter, Goyal pointed out that US President Donald Trump's sudden decision to double the rate to 50% from August 27 has unsettled Indian exporters and manufacturers, many of whom have already dispatched shipments or have confirmed orders in progress.
"Traders are in a dilemma. What will happen to the goods already shipped or those about to reach the US?" said Goyal.
Highlighting the scale of trade at stake, he noted that India exported Rs 1.7 lakh crore worth of engineering goods, including steel products, machinery, and automobile parts, to the US in 2024. These are currently taxed at 10%.
With the new tariff regime, that rate would rise to 25%, pushing up prices and making Indian goods less competitive in the American market, ANI reported.
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"For example, a $100 item which currently sells for $110 after tariff, will now cost $125. This could reduce export volumes by 10-15%," Goyal said. He warned that similar effects could ripple through other key sectors.
The gems and jewellery industry, which exported goods worth Rs 90,000 crore last year and also faces a 10% tariff, is expected to suffer.
The textile sector, too, would be hit hard, with tariffs rising from 10% to 25%.
Meanwhile, the electronics sector, which exported Rs 1.25 lakh crore worth of goods with just a 0.41% duty, would face a steep rise in costs under the new rules.
Electronics, particularly smartphones, could be among the worst affected. "A $100 smartphone currently lands in the US at $100.41. With a 25% tariff, it will now cost $125 -- a massive setback for the sector," Goyal noted.
The pharmaceutical industry also faces a major blow.
India exported Rs 92,000 crore worth of medicines to the US in 2024 with zero import duty. A 25% tariff, Goyal warned, would not only make Indian drugs more expensive but open the door for competitors like Vietnam to grab market share.
"This isn't just about business losses; it's about jobs. Thousands of Indian companies export to the US -- millions of jobs are at stake," Goyal was quoted as saying by ANI.
In light of the developments, CTI has urged the government to adopt a firm stance.
Goyal has recommended exploring alternative export destinations such as Germany, the UK, Singapore, and Malaysia, where demand for Indian engineering products is growing. He also called for a concerted effort to reduce India's dependence on US imports.
India currently imports a range of goods from the US, including minerals, precious stones, jewellery, coins, metals, nuclear reactors and parts, electrical and optical equipment, plastics, chemicals, nuts, dry fruits, iron, and steel.
"India must explore other global suppliers and reduce its reliance on American goods," Goyal said.
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