Trump Tariff Impact: Exports Council Chairman Expects Hit Of $3–6 Billion — Breakdown Here
Pankaj Chadha highlights that the new US measures will affect approximately $12.5 billion worth of exports, primarily across steel, aluminium and auto components.
India's engineering exports are facing a potential blow of up to $6 billion following US President Donald Trump's announcement of a 25% tariff and additional punitive duties on Indian goods.
Pankaj Chadha, chairperson of the Engineering Export Promotion Council, called the tariffs "unfortunate" and said they marked a worrying turn in the relationship between trade and geopolitics. He told NDTV Profit that penalties driven by political considerations were not expected and a disturbing development.
Trade policy should remain independent and not be tied to diplomatic tensions. If the 25% tariff is combined with an additional 10% penalty, the expected damage to Indian exports can reach $3.2 billion, according to Chadha.
In a worst-case scenario, where total duties climb to 50%, the hit could double to around $6 billion. He pointed out that these shifts drastically changed India's competitive positioning in global markets.
India currently exports around $20 billion in engineering goods to the US, making it the largest export segment to that market. Engineering products also account for roughly 30% of India’s total exports.
Chadha highlighted that the new US measures would affect approximately $12.5 billion worth of exports, primarily across steel, aluminium and auto components.
Steel and aluminium exports, which were not even part of the bilateral trade agreement discussions, are now facing tariffs of up to 50%. Auto component exports, currently valued at $2.6 billion, are being hit with a 25% tariff. Additionally, non-tariff barriers are compounding the pressure on Indian auto component manufacturers.
The comments come as Trump announced a 25% tariff on Indian exports on Wednesday ahead of the Aug. 1 deadline. Trump also hinted at further unspecified penalties linked to India's continued imports of Russian military equipment and energy.
The Indian government has "taken note" of Trump's remarks and is "studying" the implications of the tariffs, as well as additional penalties linked. It reiterated its commitment to a fair and balanced trade agreement, adding that it would take "all steps necessary to secure our national interest".
India and the US have been engaged in talks to finalise an interim trade deal. Despite multiple rounds of dialogue, they are to reach a mini or an interim trade agreement.
