Textiles, engineering goods, electronics, and jewellery sectors to face the brunt of 26% import tariff
Indian exporters in key sectors such as textiles, engineering goods, electronics, and gems & jewellery are expected to suffer significant losses following the 26% tariff imposed on Indian imports by former US President Donald Trump, in what experts are calling a damaging shift in American trade policy, reported timesofoman.com.
Indian exporters brace for impact as experts warn of economic and market strain
Announced early Thursday IST, the tariff move is part of Trump’s new reciprocal tariff plan, targeting several countries, including India.
According to Ajay Bagga, a banking and international stocks expert, the tariffs are based on “exaggerated calculations” factoring in customs duties, currency manipulation, and GST. He characterized the shift as a move from “America First to America Alone.”
While India’s domestic sectors may escape immediate effects, Bagga warned that exporters in key manufacturing and value-addition sectors would bear the brunt. He added that metals markets have already seen a sell-off, alongside oil, while pharma players are adopting a cautious stance as they await possible sector-specific tariffs.
The economic fallout may not stop at export losses. Higher duties are likely to erode exporter margins, potentially triggering a decline in overall Indian exports. The impact is compounded by the global market reaction, with investors shifting capital to safe-haven assets such as gold, the yen, Swiss franc, and Japanese government bonds.
“Uncertainty has now turned into a certainty of economic and market pain,” Bagga noted. “The first reaction is to rush into safe havens and to sell risk assets.”
As the trade dynamic with the US shifts, Indian exporters now face reduced competitiveness, higher costs, and uncertain market conditions. Industry stakeholders, investors, and policymakers alike will be closely monitoring the long-term economic and diplomatic repercussions of this development.
