The suggested tariffs would probably impact industries in varying degrees, with agriculture and manufacturing products shouldering the largest burden. | Image:
AI Generated
Trump Tariff War: With the upcoming reciprocal tariffs announced by US President Donald Trump on April 2nd, multiple sectors across India are facing significant risks. These tariffs, aimed at reducing the trade deficit the US faces with India, could lead to significant impact on Indian Businesses.
Which Sector Stocks Are At Risk And Which Are Safe?
The suggested tariffs would probably impact industries in varying degrees, with agriculture and manufacturing products shouldering the largest burden.
Agriculture: Indian farm exports, including shrimp, processed foods, and dairy products, are expected to bear the greatest brunt. For instance, USD 2.58 billion worth of shrimp exports face a tariff differential of 27.83%, while dairy products can face a staggering hike in tariffs to the tune of 38.23%.
Processed food, sugar, and cocoa exports of USD 1.03 billion will also face a 24.99 per cent tariff increase, making Indian snacks and confectionery expensive in the US.
Cereals, vegetables, fruits, and spices valued at USD 1.91 billion are under a 5.72 per cent tariff bracket, impacting rice and spice exports.
Dairy products valued at USD 181.49 million will be severely affected by a tariff difference of 38.23 per cent, increasing the prices of ghee, butter, and milk powder, reducing their market share.
Edible oils valued at USD 199.75 million of exports face a tariff of 10.67 per cent, increasing the cost of coconut and mustard oil.
Alcohol, wines, and spirits face the highest tariff hike of 122.10 per cent, though exports are valued at only USD 19.20 million.
Live animals and animal products face a tariff difference of 27.75 per cent on USD 10.31 million worth of exports.
Industrial Goods: Major sectors like pharmaceuticals, diamonds, and electronics are also vulnerable. Pharmaceuticals, India’s largest industrial export at USD 12.72 billion, face a tariff hike of 10.90%, while diamonds and electronics could face hikes of 13.32% and 7.24%, respectively.
Diamonds, gold, and silver with USD 11.88 billion in exports will face a tariff hike of 13.32 per cent, increasing the cost of jewellery and reducing its competitiveness.
Electrical, telecom, and electronics exports valued at USD 14.39 billion face a tariff of 7.24 per cent, increasing the cost of iPhones and other communication devices.
USD 7.10 billion worth of machinery, boiler, turbine, and computer exports will be subject to a 5.29 per cent tariff increase, affecting India’s engineering exports.
USD 5.71 billion worth of chemicals (non-pharma) will be subject to a 6.05 per cent tariff, lowering the US demand for Indian speciality chemicals.
Textiles, fabrics, yarn, and carpets with USD 2.76 billion worth of exports will be subject to a 6.59 per cent tariff, making Indian textiles costly.
Rubber products, such as tyres and belts, with USD 1.06 billion worth of exports will be subject to a 7.76 per cent tariff, and paper and wood articles, with USD 969.65 million worth of exports, will be subject to a 7.87 per cent tariff.
USD 1.71 billion worth of ceramic, glass, and stone products with exports will be subject to an 8.27 per cent tariff, affecting the demand.
Footwear, with USD 457.66 million worth of exports, will be subject to a high tariff gap of 15.56 per cent.
