Loss of tariff in these sectors

This US tariff could have a negative impact on many sectors of India and thousands of jobs could be at risk. Low-margin items such as textiles, gems and jewellery, shrimp, carpets and furniture are the main exporters to the US market. Meanwhile, competitors like Vietnam, Bangladesh, Cambodia and even China and Pakistan (which are currently facing low tariffs from the Donald Trump administration) could benefit.

PM Modi emphasized on Swadeshi

American Tariffs on India: A day before the US imposes an additional 25 per cent tariff on imports on India, effectively raising it to 50 per cent, Prime Minister Narendra Modi on August 26 emphasised on swadeshi and Make in India.

Speaking at the launch of Maruti Suzuki’s first electric vehicle in India, the e-Vitara, in Gujarat, Modi said swadeshi should be the “mantra” and no matter who invests, production should be Indian, according to a PTI report. Notably, Japan’s Suzuki Motor Corporation has committed to invest Rs 70,000 crore in India over the next five-six years.

The Prime Minister said that the country’s ‘Make in India’ initiative has created a favourable environment for both global and domestic manufacturers and the world will adopt electric vehicles manufactured in India. Maruti Suzuki’s Hansalpur plant in Gujarat is set to export electric vehicles to over 100 countries. It will also manufacture lithium-ion batteries, cells and electrodes for strong hybrid electric vehicles.

In his speech, the Prime Minister said, “My definition of Swadeshi is very simple: it does not matter whose money is used, whether it is dollars, pounds, black currency or white, it does not matter to me. The difference is that the sweat used in production is of my countrymen. The money may be of someone else, but the sweat is ours.” He said, “By 2047, we will build an India on which your future generations will be proud of your sacrifices, your contribution. In this way, Maruti Suzuki is also a Swadeshi company. The world will run electric vehicles made in India.”

The Prime Minister said today is a “great day” for Make in India as e-vehicles made in the country will be exported to 100 countries. The world will adopt EVs made in India. The Make in India initiative has created a favourable environment for both global and domestic manufacturers.

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US President Donald Trump has created a stir all over the world by starting a tariff war. He had also announced to impose 27 percent tariff on India but within 24 hours he also reduced it. According to the document released by the White House, the Trump administration has reduced the tariff imposed on India. The documents show that only India has been given this relief from the tariff imposed by the US on 60 countries of the world.

According to White House documents, the US has reduced the 27 percent tariff imposed on India to 26 percent. This tariff will come into effect from April 9 and will be imposed on all goods exported from India to the US. Earlier, while announcing the retaliatory duty, Donald Trump showed a chart showing that now India, China, UK and the European Union will have to pay duty on all their exports. The tariff on India has been reduced by 1 percent because the US has imposed only 50 percent of the tariff imposed by it on each country. If India collects 52 percent, it should have been imposed at the rate of 26 percent but it was imposed at 27 percent by mistake.

Tariff reform or relaxation

The chart released by the US shows that India collects 52 percent duty, which includes currency manipulation and trade barriers, and now the US will collect a concessional retaliatory duty of 26 percent from India. Earlier, the White House documents showed a 27 percent duty on India. It has been updated and reduced to 26 percent. However, looking at the documents, it seems that the US has not given this relaxation in the tariff, but has improved it. Anyway, industry experts say that a reduction of one percent will not have much impact.

US is the largest trading partner

The US was India’s largest trading partner from 2021-22 to 2023-24. The US accounts for about 18 per cent of India’s total textile exports, 6.22 per cent of imports and 10.73 per cent of bilateral trade. With the US, India’s trade surplus (difference between imports and exports) in textiles in 2023-24 was $35.32 billion. It was $27.7 billion in 2022-23, $32.85 billion in 2021-22, $22.73 billion in 2020-21 and $17.26 billion in 2019-20.

What makes the most exports

India’s major exports to the US in 2024 included pharmaceutical manufacturing and biological products ($8.1 billion), telecommunications equipment ($6.5 billion), precious and semi-precious stones ($5.3 billion), petroleum products ($4.1 billion), gold and others included precious metal jewelry ($3.2 billion), cotton ready-made garments including accessories ($2.8 billion) and iron and steel products ($2.7 billion). Similarly, imports included crude oil ($4.5 billion), petroleum products ($3.6 billion), coal, coke ($3.4 billion), cut and polished diamonds ($2.6 billion), electrical machinery ($1.4 billion), aircraft, spacecraft and their parts ($1.3 billion) and gold ($1.3 billion).

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