Trump’s Tariff Threat May Have Mixed Impact On Indian Exports: Expert

Srivastava noted that India’s major exports to the US include pharmaceuticals and petroleum products. For the pharmaceutical sector, which largely deals in generics, the impact could be limited

President Trump, during a recent interaction, mentioned that the ongoing India-US trade discussions were “working out very well"

Source : X/Narendra Modi

In case US President Donald Trump proceeds with the proposed 20–25 per cent tariffs on Indian goods, the consequences could vary across sectors, according to Ajay Srivastava, founder of the Global Trade Research Initiative. Speaking to ANI, Srivastava said the final impact would depend not only on the sectors targeted but also on how the US applies similar tariffs to other countries.

President Trump, during a recent interaction, mentioned that the ongoing India-US trade discussions were “working out very well,” yet hinted at the possibility of imposing steep tariffs, just days ahead of the August 1 self-imposed deadline. Srivastava explained that more clarity will emerge once the US announces its tariff structure for other trading partners.

"Only on August 1, when the US will be announcing such punitive tariffs on other countries, we'll come to know whether they are charging more or less on us. Suppose he is charging 40 per cent in some country, then we say 25 per cent is great for us," he said.

Sector-Specific Impact Could Be Minimal In Key Areas

Srivastava noted that India’s major exports to the US include pharmaceuticals and petroleum products. For the pharmaceutical sector, which largely deals in generics, the impact could be limited. “Europe will be paying 15 per cent, but European medicines are expensive, high-end proprietary medicines. We are into generics. So if we are paying 25 per cent, I don't think much of the generic market exports to the US from India will be impacted,” he said.

On smartphones, Srivastava pointed out that China and India are the primary exporters of iPhones to the US. “If China is paying 30 per cent duty, India paying 25 per cent duty, I don't think any impact will be there,” he said. Regarding petroleum, he stressed there are currently no US tariffs imposed on this category, where India exports approximately $4 billion annually.

Trade Deal Stalled Over Agricultural Access

Commenting on the pending trade deal between India and the US, Srivastava noted that India has already opened access to nearly 95 per cent of industrial products that form the bulk of US exports to India. However, agriculture and dairy remain contentious areas due to domestic sensitivities.

According to him, the US faces a dilemma: finalizing a trade deal without including agriculture may set an unwelcome precedent. “Other countries like Japan or members of the European Union, traditionally protective of their agricultural sectors, might then demand similar exemptions,” he warned.

India-UK FTA Not Comparable To US Talks

Srivastava also pushed back against the notion that the India-UK Free Trade Agreement has set a precedent for negotiations with the US. “India properly negotiated FTA where 26 subjects were negotiated at length, which is not the case with the US,” he stated.

With August 1 fast approaching, the future of US-India trade relations hinges on Washington’s tariff announcements and how they align with global trade dynamics.