On US tariffs, Union Ministry of Commerce & Industry says,
"We are carefully examining the implications of the various measures /announcements made by the President of the USA. Keeping in view the vision of Viksit Bharat, the Department is engaged with all stakeholders, including Indian industry and exporters, taking feedback of their assessment of the tariffs and assessing the situation.
The Department is also studying the opportunities that may arise due to this new development in the US trade policy."
US President issued an Executive Order on Reciprocal Tariffs imposing additional ad-valorem duties ranging from 10% to 50% on imports from all trading partners.
The baseline duty of 10% will be effective from April 05, 2025 and the remaining country specific additional ad-valorem duty will be effective from April 09, 2025.
The additional duty on India as per the Annex I of the Executive Order is 27%, the Union Ministry of Commerce & Industry stated.
On the US imposing 26% 'reciprocal' tariff on India, Grant Thornton Bharat Economist Rishi Shah says,
"The impact of tariffs remains an open question, with imposed rates higher than expected. While some sectors are exempt, overall uncertainty persists, affecting market sentiment and global trade dynamics. The long-term effects depend on how negotiations unfold, as these tariffs are not limited to India but affect economies worldwide...
Changes in production lines are expected, and businesses will closely watch the administration’s next steps. Establishing production capacities is a long-term commitment, raising concerns about the future direction of U.S. trade policies beyond the current presidency... Bangladesh, a textile leader, also faces tariffs, presenting an opportunity for Indian entrepreneurs to shift labor-intensive industries to India.
The government is exploring trade deals, including energy and defense purchases, to mitigate the impact. However, immediate effects include rising prices, and public acceptance of these changes will shape the policy’s trajectory... Pharma and IT, major export sectors, remain exempt, which benefits India. Still, other nations, like Ireland, have significant export advantages.
"India’s strength in generics is crucial, but negotiations will influence the sector’s growth. Rising U.S. drug prices could create opportunities for Indian manufacturers.
The overall impact of these tariffs will unfold over time, shaped by market responses and ongoing trade discussions," Rishi Shah said.
Forum Coordinator of AIMED (Association of Indian Medical Device Industry), Rajiv Nath says, "India exports approximately $700 billion worth of medical devices to the U.S. while importing around $1.5 billion from America.
"With rising costs, U.S. companies that had outsourced manufacturing to India, Mexico, Puerto Rico, and Ireland may now reconsider utilizing their domestic capacities at higher levels, making it harder for Indian manufacturers to compete. This shift could increase investment in domestic manufacturing in both the U.S. and India...
The recent U.S. tariff hike on medical devices—from the previous 0-6%, mostly 0%, to a new 26% rate—poses a significant challenge for Indian manufacturers.
"In contrast, India imposes import duties of 0-7.5%, mostly 7.5%, on medical devices. The increased tariff will likely impact India's medical device exports negatively.
However, given the U.S. strategy of diversifying its supply chain away from China, India still has an opportunity to position itself as a reliable alternative...
The challenge for Indian manufacturers in the U.S. is not just tariffs but also non-tariff barriers like the high cost and complexity of obtaining U.S. FDA approvals.
The statement by the Finance Ministry further revealed that discussions are underway between Indian and US trade teams to finalise a mutually beneficial, multi-sectoral Bilateral Trade Agreement.
“These negotiations encompass a broad range of issues, including supply chain integration, investment growth, and technology transfers,” the statement said.
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