Trump's Doubling of Tariffs Poses Serious Threat to India's Exporters

Jobs in country's labor-intensive sectors at risk and economic growth may be dented

- Nirmala Ganapathy

India Bureau Chief NEW DELHI - US President Donald Trump's doubling of tariffs on India would deal a severe blow to the country's exporters, denting growth in the world's fourth-largest economy and putting jobs in labor-intensive sectors at risk.

The first tranche of 25 percent tariffs kicked in at midnight on Aug 7 (Eastern Standard Time).

But Mr. Trump on Aug 6 imposed an additional 25 percent on India over its purchase of Russian oil, to come into effect within 21 days.

"They don't care how many people in Ukraine are being killed by the Russian war machine," he wrote on his Truth Social platform on Aug 4.

Mr. Trump's latest executive order marked yet another escalation in a feud with a key Asian partner, which could reverse decades of strategic courtship by his predecessors to counter China's influence in the Indo-Pacific. It would also hurt India's ambitions to more than double its exports from US$437.4 billion (S$562 billion) in 2024 to US$1 trillion by 2030.

"Given that there is a 21-day cooling period before the 50 percent tariff kicks in, we expect some negotiation to take place to lower these rates," Ms. Sonal Badhan, an economist with Bank of Baroda, told The Straits Times.

"For now, domestic fundamentals remain strong, and India being a consumption-oriented economy rather than an export-oriented economy will work in its favor," she added, referring to how most businesses in India cater to the domestic market. As it stands, Bank of Baroda estimates 25 percent tariffs on India's exports to the US may take 0.2 percentage point off its growth forecast for the Indian economy to 6.4 percent in 2025.