The United States has imposed tariffs of up to 50% on several products coming from India, but the good news is that the pharmaceutical, auto, auto parts, and metals sectors have been exempted from this penalty. This will safeguard the export business of companies like Sun Pharma, Tata Motors, Motherson Sumi, JSW Steel, and Hindalco, and investors will not experience a significant negative impact.
US 50% Tariff on India: The United States has increased the total tariff to 50% by imposing an additional 25% duty on products imported from India, which has come as a setback for Indian exporters. However, key sectors such as pharmaceuticals, auto, auto parts, iron and steel, aluminum, and copper have been excluded from this penalty. This exemption has been granted in view of the US health system's dependence on pharmaceutical drugs and the importance of metals and auto supply chains. This step will allow companies like Sun Pharma, Tata Motors, Motherson Sumi, JSW Steel, and Hindalco to remain competitive in the global market, while sectors like textiles, shrimp, and gems and jewelry will face increased pressure.
Major Relief for the Pharma Sector
India exports the most generic medicines and life-saving drugs to the United States. The American healthcare system is heavily reliant on these medicines. This is the reason why this sector has been kept out of the tariff ambit. This will directly benefit companies like Sun Pharma, Dr. Reddy’s, Cipla, and Lupin. There will be no hindrance to the exports of these companies, and their earnings are also likely to remain stable.
Tata and Mahindra to Run on American Roads
No additional duty will be applicable on passenger vehicles and light trucks going from India to the United States. This means that companies like Tata Motors and Mahindra will be able to maintain their hold in the American market. This decision has created an atmosphere of relief for the Indian auto sector as there will be no threat to export demand.
Auto Parts Supply Chain Safe
There is a large demand for Indian auto components in the American market. The United States has also kept this supply chain out of the tariff purview. Companies like Motherson Sumi and Bharat Forge are already key suppliers to the American automobile industry. Their business will continue as before since no penalty has been imposed on them.
Exemption for the Steel Industry
Indian steel makes a significant contribution to the US industry. This is the reason why an additional 25% duty has not been imposed on iron and steel products. Companies like JSW Steel and Tata Steel will benefit from this. Currently, there are no obstacles for these companies in the American market, and their export business will continue.
No Increased Burden on Aluminum
Aluminum from India is important for industrial use in the United States. That's why the tariff penalty has not been applied to it either. Companies like Hindalco will continue to benefit from aluminum exports, and there will be no additional burden of global price pressure on them.
Exemption for Copper Products Also
Copper and related products play an important role in the electronics and electric vehicle sectors. The American supply chain is heavily dependent on this metal. Copper products coming from India have also been exempted. This means that the American market will remain safe for the Indian copper industry.
Which Sectors Will Remain Under Pressure
While sectors like pharma, auto, auto parts, and metals have received relief, on the other hand, several sectors will have to face the American tariff. This includes sectors like textiles, shrimp, and gems and jewelry. The tariff will have a direct impact on these products, and exporters will have to face competition in the American market.
