New Delhi: As the first tranche of US tariffs on India takes effect, the Chamber of Trade and Industry (CTI) has raised concern, warning that such excessive
duties can hurt India's export-driven businesses. The call for retaliatory tariffs on US goods has grown as CTI Chairman Brijesh Goyal wrote to Prime Minister Narendra Modi, urging swift and strategic action, including imposing retaliatory tariffs on goods imported from the United States. Earlier, Congress MP Shashi Tharoor also called for reciprocal tariffs. In his letter, Goyal noted that US President Donald Trump, who had earlier announced a 25 per cent tariff on Indian imports, has now proposed doubling it to 50 per cent effective August 27. He warned that this abrupt escalation has sparked confusion and anxiety among Indian exporters and manufacturers, especially those with shipments already en route or orders in progress. "Traders are in a dilemma. What will happen to the goods already shipped or those about to reach the US?" said Goyal. He pointed to India’s substantial exports to the US in 2024 — worth Rs 1.7 lakh crore in engineering goods such as steel products, machinery, and automobile parts — which currently face a 10 per cent tariff. Under the proposed hike, duties would jump to 25 per cent, driving up prices and eroding the competitiveness of Indian products in the US market. "For example, a USD 100 item which currently sells for USD 110 after tariff, will now cost USD 125. This could reduce export volumes by 10-15 per cent," Goyal said. He added that similar impacts are expected across other sectors.
Multiple Key Sectors Stare at Heavy Losses
The gems and jewellery industry, which exported goods worth Rs 90,000 crore last year and currently pays a 10 per cent tariff, is among the sectors most at risk. Textiles, facing a duty jump from 10 per cent to 25 per cent, and electronics — which saw Rs 1.25 lakh crore in exports taxed at just 0.41 per cent — are also bracing for a sharp rise in costs if the new tariffs come into force.
Electronics, particularly smartphones, could be hit hard. “A USD 100 smartphone currently lands in the US at USD 100.41. With a 25 per cent tariff, it will now cost USD 125 — a massive setback for the sector,” Goyal warned.
The pharmaceutical sector is also vulnerable. India exported Rs 92,000 crore worth of medicines to the US in 2024 at zero import duty. A 25 per cent tariff would make Indian drugs far costlier, opening the door for competitors like Vietnam to seize market share.
"This isn't just about business losses; it's about jobs. Thousands of Indian companies export to the US -- millions of jobs are at stake," Goyal warned.
Look For Alternative Markets: CTI
CTI has urged the Indian government to adopt a tough stance, with Goyal recommending a shift towards alternative markets such as Germany, the UK, Singapore, and Malaysia, where demand for Indian engineering goods is on the rise. He also stressed the need to cut India’s dependence on US imports.
Currently, India sources significant volumes of goods from the US, including minerals, precious stones, jewellery, coins, metals, nuclear reactors and components, electrical and optical equipment, plastics, chemicals, nuts, dry fruits, iron, and steel.
What Shashi Tharoor Thinks India Should Do After Trump's 50% Tariff Move
On Thursday, Congress leader Shashi Tharoor suggested a potential 50% tariff on American imports if negotiations fail, and asserted that no one from another country should be able to "sit and threaten us."
Addressing reporters, Tharoor said, "It will definitely have an impact because we have a $90 billion trade with them, and if everything becomes 50 per cent more expensive, buyers will also think, why should they buy Indian products? Other countries like Vietnam, Indonesia, Pakistan, Bangladesh, and China -- if they are less expensive than us -- then naturally, India's products will not sell in the American market."
