SAILING TARIFF TROUBLES

FOCUS INDIA'S TRADE OUTLOOK

- Dhurjati Mukherjee

The present geopolitical situation has generated a lot of discussion and has, no doubt, been a cause for serious concern among Indian industry, not to speak of exporters.

US President Donald Trump recently said he will announce a 50 per cent tariff on imported copper, an effort to boost US production of a metal critical to electric vehicles, military hardware, power grid and many consumer goods.

While tariff on copper may not have much impact on India as most of copper production is used domestically, what may affect India is his announcement of tariffs on pharmaceuticals, saying the rate for medicines could reach a hefty 200 per cent but that he would give drug makers about one year to get their act together. Though a year has been given, India has to seriously think of diversifying pharma export to other destinations. Experts are of the opinion that up to 30-40 percent, or even 50 percent tariff may be acceptable and could be absorbed by industry and partly by consumers but more than that the sector may be gravely hit.

In 2024-25, India exported $4.56 billion worth of iron, steel, and aluminium products to the US, with key categories, including $587.5 million in iron and steel, $3.1 billion in articles of iron or steel and $860 million in aluminium and related articles. "These exports are now exposed to sharply higher US tariffs, threatening the profitability of Indian producers and exporters,"says founder of Global Trade Research Initiative (GTRI) Ajay Srivastava.