India May Lose Up To $6.75 Billion In Exports Due To US Tariffs: Report
The report estimates that this export shortfall, if realized, could shave approximately 0.15 to 0.2 percent off India's GDP growth in FY25
India could suffer an annual export loss ranging between $5 billion to $6.75 billion if US demand drops by 20 to 30 per cent due to newly imposed tariffs, according to a recent report by Ventura Securities. This anticipated drop follows the imposition of a 25 per cent tariff by the United States on a wide range of Indian goods.
The report estimates that this export shortfall, if realized, could shave approximately 0.15 to 0.2 percent off India's GDP growth in FY25. With the country’s GDP projected at $3.3 trillion (Rs 287 lakh crore) for the fiscal year, the impact may be noticeable, particularly in trade-sensitive sectors.
Tariff Details And Broader Trade Tensions
The imposition of tariffs comes as part of a broader policy shift by the US administration under President Donald Trump. Apart from the 15 per cent duty on Indian exports, an additional 25 per cent tariff has also been levied, with the possibility of further penalties if India continues to import crude oil from Russia.
While these measures are effective immediately, the report noted that higher tariffs are scheduled to take effect from August 7. The revised rates will remain until a new bilateral trade agreement is reached between India and the US.
India Still Competitive, Says Report
Despite the tariff hike, the Ventura report maintains that India remains a viable trade partner. "While export volumes are bound to be impacted, India can cushion much of the impact by leveraging the recently concluded FTAs with Australia, UAE, EFTA, ASEAN, and SAARC countries," it noted. These partnerships could help offset the loss of demand from the US market.
Talks Continue Amid Structural Challenges
Negotiations to finalise a bilateral trade agreement are expected to resume in mid-August, with hopes of resolving by October. In the meantime, Indian exporters may face headwinds, but the government is reportedly working to diversify export destinations and reduce overreliance on a single market.
However, trade talks have hit roadblocks in the past over U.S. demands such as opening India's agriculture and dairy sectors, accepting genetically modified (GM) feed, permitting remanufactured goods, and conforming to US digital and product standards. These issues remain contentious, as agriculture and dairy are core sectors for India, supporting millions of livelihoods.
Sector-Wise Impact Likely
Experts believe that the new tariffs will affect Indian sectors unevenly, with some industries bearing more pressure than others. Nevertheless, the overall impact may be manageable in the short term, especially if a trade agreement is finalized within the expected timeframe.
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