Concerns Rise Over New US Tariffs on Indian Exports

Impact of US Tariffs on Indian Trade

Lakshmana Venkat Kuchi

Indian businesses have voiced their concerns following US President Donald Trump's recent announcement of a 25% tariff and additional sanctions on exports from India, effective Friday. There is hope that these measures will be temporary, with expectations for a comprehensive trade agreement between the two nations in the near future.

The Federation of Indian Chambers of Commerce and Industry (FICCI), a prominent business organization, described the announcement as regrettable, emphasizing its potential negative impact on Indian exports.

FICCI President Harsh Vardhan Agarwal expressed optimism on Wednesday, stating that he believes the higher tariffs will be a short-lived issue and that a trade deal will be reached soon. He remarked, “We are hopeful that this imposition of higher tariffs will be a temporary situation and that a permanent trade agreement will be finalized shortly.”

Agarwal highlighted the longstanding partnership between India and the US, which has been bolstered by collaborative efforts in various sectors, including technology, defense, energy, and advanced manufacturing. He added, “There is significant potential for both countries to achieve mutual benefits.”

India has been engaged in discussions for a bilateral trade agreement with the US since the beginning of the year. A US delegation is scheduled to visit India in late August to continue negotiations on the BTA. Agarwal expressed hope that progress will be made, aiming to conclude discussions by September-October 2025.

The US represents a crucial market for Indian exporters in both goods and services, and the industry is eager to establish a long-term agreement. Conversely, India also presents a substantial market opportunity for US businesses and large corporations, according to FICCI officials.