Trump’s Reciprocal Tariffs Set to Hit Indian Exports from April 2
As the deadline for former US President Donald Trump’s reciprocal tariffs arrives, Indian exporters brace for potential disruptions across key industries. The proposed tariffs are a response to what Trump has frequently criticized as India’s “brutal” tariff policies, arguing that India imposes disproportionately high duties on US goods.
India-US Trade at a Critical Juncture
India currently applies an average effective tariff of 9.5% on US exports, while the US levies just 3% on Indian goods. The US remains India’s top export destination, accounting for 18% of total outbound shipments—equivalent to 2.2% of India’s GDP in FY24. With the trade surplus hitting a record $38 billion in 2024, any disruption could have significant economic implications.
Industries Facing the Greatest Impact
Industry experts warn that sectors such as information technology (IT), pharmaceuticals, automobiles, and manufacturing could bear the brunt of these tariffs.
“US government’s policy changes pertaining to tariffs have manifested in uncertainty over the last three weeks of the quarter. This may impact client decision-making and dampen recovery in discretionary spends. Manufacturing (including auto), retail, and CPG verticals may face the brunt,” said Ruchi Mukhija of ICICI Securities and ICICIDirect.
IT and Tech Stocks React
The Indian IT sector, heavily reliant on US markets, has already felt the heat. Stocks of major firms, including Infosys, Tata Consultancy Services (TCS), and Persistent Systems, fell by up to 5% ahead of the announcement. Analysts suggest that if the tariffs turn out to be less severe than expected, a market rebound could follow, especially for export-driven industries.