US President Donald Trump has once again given a big statement on the trade policy front and said to put tariffs on India. Trump says that 20 to 25 percent of tariffs can be imposed on imported goods from India. However, this is not a final decision, but a sign that has come at a time when the sixth round of talks are going to happen between India and the US about the trade agreement. This statement comes at a time when the relationship between the two countries is becoming financially and strategically strong. But if this tariff is applied, then many important export sectors of India may get a big shock. Let us understand which major areas can see the most impact on it.
1. Direct effect on textile and garment sector
India is a major exporter of textile and readymade garments and America is the largest importer of these goods from India. If a tariff of 20 to 25 per cent is imposed on them, Indian textiles and shoes will become expensive in the US market. This will directly affect shipment and can cause major damage to the MSME sector of India, which can also cause crisis on millions of employment.
2. Jewelery and Diamond sector shine faded
India is the world’s largest diamond polishing hub and America is its main customer. If the tariff is applicable from 26 to 27 percent on jewelery and diamond, then their prices will increase in the US. With this, American buyers can move to countries like Belgium, Israel or China instead of India. As a result, India’s exports may fall and the growth of the James and Jewelery sector may brake.
3. Dual pressure on automobile and auto parts industry
India is already facing 25 % tariffs on sending steel and aluminum products to the US. Now if auto and auto parts are also taxed from 25 to 27 per cent, then American market will no longer be competitive for Indian companies. This will not only reduce exports, but the Indian auto industry may also decline in orders from America.
4. Mobile and electronics export also shock
India sends a mobile, telecom and electronics products worth about $ 14 billion to the US every year. The region is included in India’s fast growing exporters. But if 20-25 percent of tariffs are implemented on them, then their prices will increase in the US and buyers can find other options. This may lead to a major decline in India’s electronics exports.
5. Chemical sector will not be saved
India exports a large amount of organic and inorganic chemicals to the US. If the tariff also reaches the chemical sector, it can affect pharma, manufacturing and many industrial processes. This may cause India’s chemical industry damage in global competition.
