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Time of India
7 days ago
- Business
- Time of India
Donald Trump's 25% tariff blow hits India: Will your wallet, GDP and global image pay the price? Here's what we know
US President Donald Trump has declared a 25% tariff on goods imported from India, starting August 1, with an added but unspecified penalty. The action, announced on his Truth Social platform, ties India's trade to its continued imports of Russian oil and arms. Trump wrote that India is buying from Russia 'at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE.' The magnitude of the economic impact will depend heavily on details still to come. Experts suggest that if the additional penalty is steep, it could further reduce India's growth prospects. Growth forecasts lowered as markets react Ratings agency ICRA has adjusted its GDP projection for India from 6.5% to 6.2%, citing the tariff hike. Chief Economist Aditi Nayar said the measures are more severe than expected and will likely pose a challenge to growth. Nomura added that the decision is 'growth negative' and could shave 0.2% off GDP. Donald Trump has just imposed a 25% tariff on India. He has also imposed a penalty. ⦁ Modi campaigns for Trump.⦁ Gives out slogans like 'Abki Baar Trump Sarkar'. ⦁ Hugs him like a long-lost return, Trump goes on to impose such harsh tariff on India. It is… Markets responded with caution. Indian indices opened in the red following the announcement. Fund manager Nilesh Shah noted that the markets had anticipated a trade deal, given broader alignment in US-India strategic interests. Export competitiveness at risk India had reduced tariffs on goods like Bourbon whiskey and motorcycles to encourage a deal, but the US continues to run a $45 billion trade deficit with India. Trump has prioritized closing that gap. Compared to China and Vietnam — who recently negotiated lower US tariffs — India now appears less competitive. Rahul Ahluwalia from the Foundation for Economic Development said the tariff structure leaves India disadvantaged in competing for foreign investments and manufacturing. The likely sectors to face an immediate impact are marine products, automobiles, pharmaceuticals, leather, and textiles, according to Agneshwar Sen of EY India. Donald Trump impose 25% tariffs on India 😡Trump Put India and China in same category 🤔Miss You Biden 🤣#viralvideo #DonaldTrump #tariff #pmmodi #china Exporters caught in the middle Indian exporters may need to renegotiate pricing with US buyers. Dr. Ajay Sahai, who leads a federation of export organizations, said the tariffs will result in price adjustments and affect margins, particularly where exporters are forced to absorb some of the hike to stay competitive. India's commerce ministry said it is reviewing the implications of the move. It emphasized a commitment to reaching a mutually beneficial deal but reiterated the importance of protecting vulnerable sectors like agriculture and small businesses. Political and strategic fallout India's opposition Congress party criticized Prime Minister Modi for his earlier public support of Trump, calling the tariff announcement a 'catastrophic failure of foreign policy.' Trump's decision to connect the trade penalty with India's economic ties to Russia has further complicated the ongoing negotiations. Mark Linscott, former US trade representative, noted that incorporating defense and energy into trade discussions has made reaching an agreement more difficult. Despite the current tensions, both sides appear committed to continuing talks. The US is India's top export destination, and the two countries conduct $190 billion in bilateral trade — a figure they hope to grow to $500 billion. Still, even under the best-case scenario, tariff rates might settle at 15–20%, which Nomura said is underwhelming considering India's progress in earlier rounds of talks. Outlook: Uncertain but ongoing While India's economy is less dependent on goods exports than some of its Asian counterparts, analysts believe the tariff issue could influence monetary policy decisions. Nomura suggested that the pressure on growth might encourage India's central bank to consider further rate cuts to maintain momentum. Trump's tariff move could disrupt India's exports and growth path unless negotiations reset the balance in time. To stay updated on the stories that are going viral follow Indiatimes Trending.
The Hindu
07-06-2025
- Business
- The Hindu
Government urged to address structural issues faced by the textile and apparel sector
The government should address the structural challenges faced by the Indian textile and apparel industry to achieve $ 100 billion exports by 2030, according to stakeholders of the industry. At a meeting held in Coimbatore on Friday (June 6, 2025) to discuss the challenges faced by the textile and apparel exporters, they discussed the reasons for the nil growth in textile and apparel exports for almost a decade. The exports are stagnant at about $ 40 billion in value. The volume of exports has declined which is a matter of concern, they said. The exports should grow at 17% CAGR to achieve the target of $ 100 billion by 2030. Structural issues, including raw material prices and high labour costs, are a major hurdle apart from cost of capital, power tariff, and relatively higher lead time to deliver orders. Since the return on investment is not viable, the industry is not ready to invest in expansion projects and build capacities. A report by AT Kearney Consulting and the Foundation for Economic Development said the government introduced schemes such as the PM MITRA, PLI, advance authorisation, etc to address the cost issues. However, according to the stakeholders, for the industry to tap opportunities in the international market and register growth, the basic challenges need to be addressed as these schemes have not given the required cost advantage.
Mint
22-04-2025
- Business
- Mint
Niti Aayog eyes $25 billion exports of hand and power tools by 2035
New Delhi: The federal policy think tank Niti Aayog on Tuesday laid down a road map to increase India's exports of hand and power tools to over $25 billion by 2035 from $1 billion in 2025. The plan proposed by Niti Aayog and the Foundation for Economic Development (FED) involves creating manufacturing clusters for such tools across the country, bolstered by a cumulative ₹ 57,000 crore investment by government and industry, as per a Niti Aayog press statement. Also Read | Five-year plans back at Niti Aayog, this time to cut emissions The goods included in this plan include wrenches, pliers, screwdrivers and drills, among others. The report also stated that the target of over $25 billion in exports over the next decade is possible by targeting a 10% market share of power tools exports and a 25% market share of hand tools exports. The Niti Aayog report said India has a comparative advantage over China in exporting these goods, as the US, one of the largest importers of these goods, has levied heavy tariffs on Chinese hand and power tools. India's position in the global tool market is currently overshadowed by China, which controls about half of the world's trade in hand and power tools. Also Read | Niti Aayog to launch Investment Friendliness Index by July While Chinese hand and power tool exports account for about $16 billion annually—roughly 50% of the market—India's share in the global export market is marginal, illustrated by a market share of 1.8% of all hand tools and 0.8% of all power tools. However, the study published by Niti Aayog and FED suggested that the wave of Chinese tools exports, which benefited from the country's cost advantage, is likely to hit a trough in the near future, mainly due to tariffs and rising labour costs. The April 2025 report said these conditions would aid India's position in the global export market for hand and power tools. Over the last three weeks, US President Donald Trump and China have engaged in a battle of retaliatory tariffs. On 16 April, the US imposed 245% tariffs on Chinese goods, following a tussle in which both sides continued hiking tariffs against each other. Experts said India could benefit from such conditions with its existing tool exporting hubs in Punjab and Maharashtra. Rahul Ahluwalia, founding director of FED, explained that India's tool production is driven by the massive supply of labour in the country, and a targeted focus on developing this industry would generate millions of jobs. "The main reason the hand and power tools sector is important because it is relatively labour-intensive. And there is a pretty large export market we can get. We already have a competitive ecosystem in India doing a few hundred million dollars of exports. If we play our cards right, we can increase that to $25 billion," said bringing this plan to fruition would be an uphill task, the report stated. India's 14-17% cost disadvantage compared to China is a massive challenge to overcome. Additionally, Indian manufacturers fall behind in the technical know-how necessary for a robust manufacturing ecosystem. Land availability for manufacturing such tools, as well as government support through various schemes, is limited, the report said. Building manufacturing clusters in public-private partnership models and employing a plug-and-play model in these hubs is a key part of the roadmap towards increasing India's hand and power tools exports. The report stated a plan to build 3–4 clusters spanning about 4,000 acres by 2035. Market reforms, including reducing import duties and other import restrictions on raw materials and machinery, would also help bolster domestic manufacturers. The report also recommended a bridge support of ₹ 5,800 crore over five years as market reforms take shape. First Published: 22 Apr 2025, 09:59 PM IST
