Trump's Reciprocal Tariffs to Take Effect April 2nd, Potentially Causing $31 Billion in Losses for Indian Exporters; Pharma, Tech, and Jewelry Sectors Directly Impacted.
US Tariff: US President Donald Trump is set to implement reciprocal tariffs starting April 2nd, inevitably impacting global trade. India, previously labeled a "tariff king" by Trump, is a primary target of these new tariffs. This is expected to result in potential export losses for India, potentially reaching $31 billion.
Which Sectors Will Be Most Affected?
Trump's tariff plan could severely impact India's automobile, pharmaceuticals, electronics, and gems-jewelry sectors. The US recently announced increased tariffs on imported cars and auto parts, and now the pharmaceutical, technology, and jewelry sectors are anticipated to face repercussions.
Pharmaceutical Sector to Face the Most Significant Impact
India is the largest supplier of generic drugs to the US market. Currently, the US imposes minimal tariffs on pharmaceutical imports, while India levies a 10% tariff on US pharmaceutical products. Trump's new policy could subject Indian pharmaceutical companies to heavy tariffs, directly impacting their costs and profits.
Which Companies Will Be Affected?
Experts suggest that Trump's new tariff policy will also impact the Indian stock market. Fluctuations are expected, particularly in the shares of pharmaceutical companies such as Sun Pharma, Cipla, Lupin, Dr. Reddy's, and Divis Labs. In the tech industry, Dixon Technologies and Kennametal could be affected, while in the jewelry segment, Malabar Gold, Renaissance Jewellery, Rajesh Exports, and Kalyan Jewellers may experience negative consequences.
Pressure on India-US Trade Relations
The US is India's third-largest investor, having contributed $67.76 billion in FDI since 2000. In fiscal year 2024, India's total exports to the US amounted to $77.5 billion, while imports from the US reached $40.7 billion. Therefore, Trump's tariff policy is likely to increase tensions in bilateral trade relations.
Impact on the IT Sector
Leading Indian IT companies like Infosys and TCS may also suffer from this tariff policy. Increased trade tensions between the US and India could lead to reduced client spending for these companies, impacting their profitability.
