The Way To Counter Reciprocal Tariffs

Indian manufacturing, already in a vulnerable position, is likely to be severely affected by US President Donald Trump's reciprocal tariffs.

- TULSI JAYAKUMAR

Despite the government's efforts to boost the sector through the 'Make in India' initiative, the share of manufacturing in India's GDP was slightly lower at 15.83 percent in 2023-24, compared to 15.99 percent in 2014-15.

Reciprocal tariffs refer to levies on imports from any nation that charges duties on US exports. "An eye for an eye, a tariff for a tariff—the same exact amount," Trump promised during his campaign. What remains unclear is how these tariffs would be calculated.

With the US being India's largest export partner, Trump's reciprocal tariffs will likely have far-reaching consequences. The US administration's plans to impose tariffs on steel, aluminum, pharmaceuticals, textiles and certain electronics will significantly challenge Indian exports to America. These tariffs will not only increase costs for Indian exporters but also shrink market share, intensify competition from imports, and potentially lead to job losses and investment slowdowns.