'Nothing Radical Will Happen': Experts Weigh In On Trump's Reciprocal Tariffs' Impact On India

As the U.S. prepares to impose reciprocal tariffs on April 2 on countries taxing U.S. imports, experts are weighing in on what this means for India.

Jayant Krishna, Senior Fellow at the Centre for Strategic and International Studies (CSIS), expressed optimism, stating, "Nothing radical will happen in a few hours from now, it could perhaps be a 10% tariff, which is an impact that India can cope with and could recover with other opportunities but more than that will be difficult."

IAS Anup Wadhwan, Former Commerce & Trade Secretary, highlighted the uncertainty surrounding the tariffs. "As per impact is concerned, it is hard to guess, it depends on the nature of tariffs that are put in place, items covered…all that is very unclear," he said.

Wadhwan emphasised that while the term "reciprocal" suggests a tit-for-tat approach, the specifics of the tariffs remain ambiguous.

He added, "I don't think those tariffs are going to be trade-stopping tariff because that will be disastrous and they will invite retaliation."

Radhika Rao, Senior Economist & Executive Director at DBS Bank, provided insights into the potential economic impact on India. "The quantum of the trade surplus that India has with the U.S. in terms of percentage of GDP is 1-1.12% of GDP, it is not that significant but a number to reckon with," she noted.

Rao explained that India's exports to the U.S. are primarily composed of raw materials and capital goods, such as gems and jewelry, chemicals, and pharmaceuticals, rather than manufactured consumer goods.

This composition, she argued, means that the inflationary impact of the tariffs on India would be less severe compared to countries like China, whose exports to the U.S. are largely manufactured goods. "I think 10-20 basis points of net impact is possible, depending on the nature of the tariff," she added.