INSTANT VIEW - Trump order imposes an additional 25% tariff on Indian goods
The U.S. president Donald Trump issued a executive order Wednesday that imposed an additional 25% tariff for goods coming from India. He claimed the country had directly or indirectly imported Russian crude oil.
India, along with Brazil will be subject to the highest tariffs. This puts it at a disadvantage against its regional competitors like Vietnam and Bangladesh.
A. PRASANNA CHIEF ECONOMIST ICICI SECURITIES PRIMARY DEALERSHIP MUMBAI
After 21 days, the additional tariffs come into force. However, they will be added to the 25% rate that was already in place. This means that a total of 50% will be a negative for Indian exports. However, some important segments such as electronics and pharmaceuticals continue to be exempted from this additional rate.
Many Indian exports are at a disadvantage compared to countries in the 15-30% category.
SAKSHI GUPTA - PRINCIPAL ECONOMIST HDFC BANK GURUGRAM
Trump's executive order allows another 21 days to reach a deal, but if it doesn't, we will need to lower our FY26 GDP forecast significantly to below 6%. This would mean a 40-50 basis point hit. This would be twice our previous estimates (of the GDP hit by higher tariffs).
TERESA JOHAN, LEAD ECONOMIST NIRMAL BANK, INSTITUTIONAL EQUALITIES, MUMBAI
India is under increasing pressure to reach a trade deal. India could agree to reduce its Russian purchases in a gradual manner, and to diversify.
GAURA SEN GUPTA ECONOMIST IDFC FIRST BANK MUMBAI
After this order, bilateral tariffs are expected to rise by 50%. This would be the highest rate of tariffs from August. This increases the risk of a lower GDP estimate for 2025-26.
The total risk of a tariff-induced recession is currently estimated to be between 0.3% and 0.4%. Reporting by Nikunj Ahri, Swati Bhaat and Aleef Jhan in Mumbai. Writing by Ira Dugal. Editing by Toby Chopra.
(source: Reuters)
