New Delhi [India], August 7 : The Chamber of Trade and Industry (CTI) has raised alarm over the recent U.S. tariff hike plans, warning that increasing duties to 50 per cent on Indian goods could severely impact India's export-driven businesses.
CTI Chairman Brijesh Goyal has written to Prime Minister Narendra Modi, urging swift and strategic action, including imposing retaliatory tariffs on goods imported from the United States.
In his letter, Goyal stated that American President Donald Trump, after previously announcing a 25 per cent tariff on Indian imports, has now proposed to double it to 50% from August 27. This sudden escalation has created confusion and unrest among Indian exporters and manufacturers, particularly those with ongoing shipments or confirmed orders.
"Traders are in a dilemma. What will happen to the goods already shipped or those about to reach the U.S.?" said Goyal.
He cited India's significant exports to the US in 2024 including Rs 1.7 lakh crore worth of engineering goods such as steel products, machinery, and automobile parts which are currently taxed at 10 per cent.
Under the new structure, the tariff would rise to 25 per cent, increasing product prices and reducing competitiveness in the U.S. market.
"For example, a USD 100 item which currently sells for USD 110 after tariff, will now cost USD 125. This could reduce export volumes by 10-15 per cent," Goyal said. He added that similar impacts are expected across other sectors.
The gems and jewellery sector, which exported goods worth Rs 90,000 crore last year and currently faces a 10 per cent tariff, is also at risk. The textile sector, facing a tariff increase from 10 per cent to 25 per cent, and the electronics sector which saw Rs 1.25 lakh crore in exports taxed at just 0.41 per cent will see a dramatic rise in costs if the new tariffs are implemented.
Electronics, especially smartphones, may face severe consequences. "A USD 100 smartphone currently lands in the U.S. at USD 100.41. With a 25 per cent tariff, it will now cost USD 125 a massive setback for the sector," Goyal noted.
The pharmaceutical industry, too, stands to lose. India exported Rs 92,000 crore worth of medicines to the US in 2024 with zero import duty. If the proposed 25 per cent tariff is applied, Indian drugs would become significantly more expensive, providing an opportunity for competing nations like Vietnam to capture market share.
"This isn't just about business losses; it's about jobs. Thousands of Indian companies export to the U.S. millions of jobs are at stake," Goyal warned.
CTI has urged the Indian government to take a firm stand. Goyal recommended that India identify alternative markets such as Germany, the UK, Singapore, and Malaysia where demand for Indian engineering goods is rising. He also called for reducing India's dependence on US imports.
India currently imports high volumes of items from the US, including minerals, precious stones, jewellery, coins, metals, nuclear reactors and components, electrical and optical equipment, plastics, chemicals, nuts, dry fruits, iron, and steel.
"India must explore other global suppliers and reduce its reliance on American goods," Goyal said.
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