In a striking and aggressive maneuver that embodies hardball trade tactics, US President Donald Trump has imposed an average 50 per cent punitive tariff on Indian goods imports, effective August 27. This action has disrupted Indian export sectors, given that the US constitutes approximately 20 per cent of total Indian exports and represents 2 per cent of its GDP. Such drastic measures threaten the future of India-US trade relations, which had been on a strong upward trajectory until now. A sharp increase in tariffs will make Indian exports significantly more expensive and drastically reduce their competitiveness in the American market.

The United States stands as India’s largest trading partner, with total goods exports reaching $86.51 billion. Remarkably, around 44 per cent of these exports stem from pharmaceuticals ($10.5 billion), electronics including smart phones and semiconductors ($14.6 billion), engineering goods and auto components ($9.3 billion), and petroleum exports ($4.09 billion), all of which are currently exempt from these punitive tariffs. It’s important to note that a 25 per cent base tariff on Indian imports was already in place, having previously ranged from 0 per cent to 10 per cent. This exemption provides a crucial lifeline to these sectors, which collectively account for a significant portion of $38.49 billion in merchandise destined for the US. While this exclusion offers some relief, it cannot mask the larger threat looming over other sectors.

In stark contrast, sectors like agriculture and food processing, textiles and apparel, diamonds-gems and gold jewelry, machinery and mechanical appliances, leather and footwear, and chemicals and dyes face severe additional tariffs. Consequently, approximately $48.02 billion remains vulnerable to an average 50 per cent duty. Various analysts predict that even a conservative 20 per cent reduction in exports could slash India’s........

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