US Tariffs Impact: US tariffs may threaten lakhs of jobs in India
US Tariffs Impact: The Chamber of Trade and Industry (CTI) has addressed a letter to Prime Minister Narendra Modi, expressing concerns that the 50 percent tariff imposed by the United States could severely impact major Indian industries and endanger the jobs of hundreds of thousands of Indians.
"The 50 per cent US tariff will have a devastating impact on India's textiles, leather, gems and jewellery, auto components, chemicals, pharma, seafood, electronics and other sectors," CTI Chairman Brijesh Goyal said.
He explained that because of the increased tariffs, Indian goods will be up to 35 per cent costlier in the American market compared to competitors, prompting buyers to look elsewhere.
According to CTI, the hike could affect more than USD 48 billion worth of Indian exports. Sectors like engineering goods, which saw exports of Rs. 1.7 lakh crore last year, are expected to take a sharp hit. Similarly, gems and jewellery exports worth Rs. 90,000 crore, and India's booming electronics shipments are also under severe threat
Products that earlier faced a 10 per cent tariff will now carry a 50 per cent tariff, drastically raising costs for US buyers.
Pharmaceutical exports, valued at Rs. 92,000 crore last year, will also face hurdles. Medicines that previously entered the US duty-free will now cost 50 per cent more, placing Indian pharma firms at a disadvantage compared to other suppliers, such as Vietnam.
However, despite these losses, Goyal advised the government that India should respond firmly to the United States' steep tariff hike by imposing retaliatory tariffs on American goods. "India must not be afraid of this pressure. We should reduce our dependence on American imports and simultaneously explore new markets in countries such as Germany, the U.K., Singapore and Malaysia, where demand for engineering goods is rising. We must teach the US a lesson with counter-tariffs."
In his letter to the Prime Minister, Goyal urged that India must reduce its dependence on American imports like minerals, precious stones, metals, aircraft equipment, plastics, and chemicals. The US government's decision, effective August 27, comes on top of a 25 per cent tariff already in place since August 7.
CTI General Secretaries Rahul Adlakha and Rajesh Khanna emphasized that India's exports to the U.S. consist of 53 percent pharmaceuticals, 53 percent textiles and apparel, 37 percent gems and jewelry, 28 percent auto components, 13 percent chemicals, and 22 percent seafood. They pointed out the widespread uncertainty among traders regarding the impact of tariffs on goods that have already been shipped or are in transit, as the Washington administration has not provided any clarity.