Cargo Breaking News
US President Donald Trump has announced his decision to impose 25 per cent tariffs on goods imported from India along with an unspecified penalty on India for buying Russian oil and weapons starting 1 August. “Remember, while India is our friend, we have, over the year done relatively little business with them because their tariffs are far too high, among the highest in the world and they have the most strenuous and obnoxious non-monetary trade barriers of any country,” Trum said in a post. Reacting on how the decision will impact the trade, Sunil Kohli, MD, Rahat Cargo said, “The sudden announcement of a 25 per cent tariff on Indian goods, while higher than anticipated, broadly falls within the 15–20 per cent range that markets had been bracing for. This could well weigh on near-term export competitiveness and trigger currency volatility if sentiment deteriorates. What is more concerning is the penalty clause, which remains unquantified at this stage. However, if the tariffs stay at 25 per cent for an extended period, the impact could be significantly negative. The agricultural and dairy product protections remain primary concerns, as these sectors are politically and economically sensitive for India. Hence, India is negotiating with the US against any tariff reductions on dairy, rice, wheat and genetically modified (GM) crops like corn and soybeans citing the livelihoods of over 700 million rural citizens, including 80 million smallholder dairy farmers. Many Indian exporters are now preparing for the worst. The newly imposed tariff could affect products like gems and jewellery, auto parts, seafood, textiles and chemicals as these are major exports to the US. In 2024, India exported goods worth $87 billion to the US and hence any drop in the exports is likely to hit the shippers. The next steps are unclear. While Trump has announced the 25% tariff from August 1, he has also said talks are continuing. A US trade team is expected to visit India in August for further negotiations. Whether this visit leads to any resolution remains to be seen and let us hope that the further deliberations lead to certain positive outcomes yielding relief to the trade fraternity in India.
