Fresh Trump tariffs: India puts up brave front, but can it mitigate future risks?

US President Donald Trump has imposed additional tariffs on India to the extent of 25 per cent, taking the total tariff level to 50 per cent.

- RITWIK MUKHERJEE

This will severely hit sectors such as drugs and pharmaceuticals, textiles, electricals and electronics, gems and jewellery.

So, this is certainly a reason for us in India to be concerned, but no reason for us to be alarmed, feels Dr. Manoranjan Sharma, Chief Economist, Infomerics Ratings.

Initially, these tariff increases seemed to function as negotiation strategies; however, their ongoing presence introduces potential future risks. Should these elevated tariffs become permanent, sectors that are labour-intensive, such as jewellery, textiles, and fisheries – primarily composed of MSMEs – would be disproportionately impacted, thereby exerting additional pressure on the labour markets.

Given that numerous Indian competitors have obtained more favourable tariff rates, the lack of a trade agreement or delays in establishing one could prompt calls for targeted government assistance for the affected industries, says Vipul Bhowar, Senior Director - Listed Investments, Waterfield Advisors.