Navigating US tariffs: Challenges and opportunities for Indian exporters

The imposition of a 27 per cent additional tariff by the United States (US) on Indian imports under its "reciprocal tariff" policy presents a significant challenge for Indian exporters.

- AGNESHWAR SEN

This move is part of a broader effort by the US to correct perceived trade imbalances and encourage manufacturing relocation to its domestic market. While some of India's competitors face even higher tariffs, Indian exporters must carefully assess the impact of these duties and adopt strategies to mitigate their adverse effects.

Impact on key export sectors One of the most affected industries is gems and jewellery, which contributes significantly to India's export earnings. The US is a key destination, accounting for nearly $10 billion of India's $32 billion in exports in this sector. However, with the newly imposed 27 per cent additional tariff, the industry faces a possible decline in demand, which may impact its revenue. Similarly, the textile and apparel industry are under pressure, although it benefits somewhat from the fact that key competitors like China and Vietnam face even steeper tariffs of 54 per cent and 46 per cent, respectively. While this provides some relative advantage, Indian manufacturers will still have to navigate rising costs and shifting supply chain dynamics.