He believes that in India’s case, an overall realignment could result in an additional 6-7% US tariff, whereas a product-by-product approach might lead to an increase exceeding 10%.
India is a large, relatively closed economy, so he believes this will not derail the country from its reasonably strong growth trajectory.
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Tilton said, “In terms of sectors that might see lower tariffs in order to stave off the increases on the US side, I believe we have already seen some cuts in motorcycles, electronics, so those would be a couple of areas that be affected relatively sooner. I know there has been some discussion of autos potentially, so those would be a few that I think are in focus.”
The impact on Indian exporters will vary by sector. For example, while US tariffs on semiconductors may not affect India much, other goods with more flexible demand, like apparel, could see a shift in buyers choosing other countries.
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Some Indian exports to the US fall into these categories, which might lead to a slight decline in demand. However, since the US is considering tariffs on multiple countries as part of its broader trade policy, the overall effect will depend on how these measures unfold globally.
Goldman Sachs highlights that India’s trade surplus with the US has doubled over the past decade, reaching $35 billion in FY24. The firm also notes that India generally imposes higher tariffs than the US across most product categories.
The largest tariff differences are observed in agricultural products, textiles, and pharmaceuticals.
For full interview, watch accompanying video
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(Edited by : Shweta Mungre)