Indian exporters are facing significant challenges due to US retaliatory tariffs, with sectors like agriculture, pharmaceuticals, and machinery being heavily impacted. The 27.83% duty difference on shrimp exports is particularly concerning, potentially leading to substantial losses.
Washington: The US imposing retaliatory tariffs on Indian products may affect goods in sectors including agriculture, precious stones, chemicals, pharmaceuticals, medical devices, electrical and machinery. Experts say these sectors could face additional customs duties from the US administration due to the high tariff differential. High duty difference is the difference between the import duties imposed by the US and India on a product. At the wider sector level, the potential tariff differential between India and the US varies across regions.
It will affect all areas
The difference is 8.6 per cent on chemicals and pharmaceuticals, 5.6 per cent on plastics, 1.4 per cent on textiles and garments, 13.3 per cent on diamonds, gold and jewellery, 2.5 per cent on iron, steel and base metals, 5.3 per cent on machinery and computers, 7.2 per cent on electronics and 23.1 per cent on vehicles and their components. "The greater the tariff differential, the more the sector will be affected," said an exporter. According to an analysis by research initiative Trade Global GTRI, the most affected sectors in agriculture will be fish, meat and seafood.
40% of shrimp exports to the US
Its exports in 2024 were USD 2.58 billion and will face a 27.83 per cent duty difference. Shrimp, which is a major export to the US, will become significantly less competitive as the US tariffs come into force. Yogesh Gupta, managing director of Mega Moda, a Kolkata-based seafood exporter, said, "Our exports to the US are already subject to anti-dumping and countervailing duties. An additional increase in tariffs will make us uncompetitive. Out of India's total shrimp exports, we export 40 per cent to the US.
Indian exporters may get some relief if the US imposes similar tariffs on rival countries like Ecuador and Indonesia, he said. India's exports of processed food, sugar and cocoa could also be impacted as the duty differential stands at 24.99 per cent. Its exports stood at USD 1.03 billion last year. Similarly, the tariff differential among cereals, vegetables, fruits and spices (exports of USD 1.91 billion) was 57.2 per cent.