Brace up for long-term impact of US tariffs, warn industrialists

TNN / Apr 8, 2025, 23:05 IST

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Brace up for long-term impact of US tariffs, warn industrialists

Ludhiana: After reciprocal tariffs by the US on countries, including India, Ludhiana industry is taking some respite in the fact China has been imposed higher tariffs. Industry associations leaders, however, warn that though there might be some solace, in the long term India needed to brace up for the impact and also take proactive steps against the policies of China as well as it might try to make up for the losses against the US by dumping policy in India.
Baseline duty of 10% from US came into effect from April 5, 2025, on all imports along with country-specific duties, with the additional duty on Indian goods set at 27%, as stated in Annex I of the executive order. These country-specific tariffs will take effect from April 9, 2025.
Badish Jindal, president of World MSME Forum, said the new tariffs announced by America will have adverse effects on the entire world, including India. "America has decided to impose a 26% tariff on India, but ours is not the only country on which tariff has been imposed, hence its ill effects on Indian industries will not be felt immediately. This increased tariff will have a direct impact on many industries of India though," he added.
The US has imposed 26% duty on India whereas the duty on China is 34%. So in few products it can prove to be a win-win situation for India. India can get its benefits in exports of machinery, iron and steel products, electricals and electronics, garments and auto parts, he stated.

The exports of garments, leather products, carpets, gems and jewellery, fishes and other food products may dip immediately as high tariffs will increase its cost in the US. The industry of Punjab will get impacted from iron and steel products, garments, carpets, auto parts, leather goods & plastic and rubber products.
India may face also dumping from China and other countries. It is already having a trade imbalance of Rs 20 lakh crore and the Indian government must consider the safeguard duties on imports from China and other countries, he warned.
He added that India must brace up and take measures to bolster the economy, because these tariffs have long-term impacts as this would help in re-industrialization in the US and the country's dependency will drop on imports.
Upkar Singh Ahuja, president of the Chamber of Industrial & Commercial Undertakings (CICU), also expressed deep concern over the imposition of reciprocal tariffs on imports by the US.
Ahuja emphasized that this move could have significant adverse impacts on Indo-US trade relations, particularly affecting Indian exporters across a wide range of industries. "Such high tariff rates may reduce the competitiveness of Indian products in the US market, thereby impacting export volumes, order pipelines, and overall industrial growth," he stated.
He urged the Government of India to engage in diplomatic and trade dialogues with the US administration to seek relief or reconsideration of these harsh tariff measures. It also calls upon exporters and industry stakeholders to prepare for possible disruptions and explore diversification strategies in export markets, he added Speaking about it, Pankaj Sharma, president, Association of Trade & Industrial Undertakings, stated that the recent development in which the US had imposed 26% tariff on Indian products would have a long-lasting impact on the Indian economy.
India must explore ways on how to alleviate the concerns of US economists so that both could arrive at a win-win situation. He, however, said the silver lining for India was that the US had slapped higher tariffs on other textiles exporting countries like, Bangladesh, Vietnam, China, Sri Lanka. So India stands a good chance to enhance its exports to the US because of its proven credentials of providing high quality goods with timely delivery commitments. With China having imposed a 34% return tariff on US goods, both economic superpowers; China & US have started a trade war. As India is not in a position to impose harsh trade barriers so the commerce ministry must take immediate steps to protect its agriculture and auto industry. The Indian economy will have an advantage because of lesser tariffs imposed by US as compared to China, Vietnam and Thailand.
This is also an opportunity for India to strengthen exports to the US, especially for the textiles, pharma and autopart industry, but the Indian government should remain vigilant especially against China tha might try to derail the Indian economy by dumping its goods in India because of its enormous consumption, Sharma said.

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