‘No cause for panic’: India-US tariff issue manageable, say govt sources; impact unlikely to be ‘severe’
NEW DELHI: Government sources on Wednesday said there is “no cause for panic” over the 50% tariffs imposed by the US on Indian goods, adding communication channels between New Delhi and Washington remain open to resolve the issue.“Communication channels are open between India and the US to resolve the ongoing tariff issues,” PTI reported, quoting sources.“The impact (of the tariffs) is unlikely to be as severe as feared given the diversified nature of Indian exports,” they added.The sources further said that the impact of the duties, effective from August 27, is “unlikely to be as severe as feared” given the diversified nature of India’s export basket. The exporters should not be alarmed, the sources said, describing the tariff move as “a temporary phase in a long-term partnership” between New Delhi and Washington.India’s exports to the US have already risen 21.6% to $33.53 billion in the first four months of this fiscal year, and may touch last year’s figure of $86.5 billion, officials said.
Earlier, US Treasury Secretary Scott Bessent acknowledged that the bilateral trade relationship is “very complicated” but expressed confidence that “at the end of the day, we will come together.” “This is a very complicated relationship. President (Donald) Trump or Prime Minister (Narendra) Modi have very good relationships at that level. And it’s not just over the Russian oil,” Bessent added.His remarks came as an additional 25% penalty on Indian imports of Russian oil took effect on August 27, raising the total tariff burden on Indian goods to 50%.The Trump administration’s sweeping duties target several labour-intensive sectors, including textiles, gems and jewellery, shrimp, leather and footwear, animal products, chemicals, and machinery, while excluding pharmaceuticals, energy products, and electronics.According to the Global Trade Research Initiative (GTRI), the move will hit 66% of India’s $86.5 billion exports to the US, with exports projected to fall sharply to around $49.6 billion by FY26. GTRI founder Ajay Srivastava called the duties “one of the most severe trade shocks India has faced in recent years.”“The United States’ new tariff regime marks one of the most severe trade shocks India has faced in recent years. With over two-thirds of India’s $86.5 billion exports to the US now subject to prohibitive 25-50 per cent duties, critical labour-intensive sectors face sharp declines in competitiveness and employment,” Srivastava told PTI.Meanwhile, the commerce ministry has begun stakeholder consultations with exporters in sectors like chemicals and gems & jewellery to identify alternative markets. “In the next 2-3 days, the ministry will meet stakeholders on the diversification of exports,” an official said.
