The new U.S. tariffs on Indian exports—set at 50 percent effective August 27—are being described by economists as both an “economic shock” and a potential wake-up call for India to break free from overdependence.
According to experts, if policymakers, industry leaders, and diplomats act decisively, the current tariff crisis could serve as a turning point for India’s economy. “The task ahead is difficult, but with sincerity of purpose and united effort, we can and will overcome this challenge. What is required is to go full steam ahead and fire on all cylinders,” said Manoranajan Sharma, Chief Economist at Infomerics Ratings.
The tariffs stem from India’s continued purchase of Russian oil and arms, a move Washington views as risky for bilateral relations. Economists warn this policy shift could significantly disrupt trade ties that India and the U.S. have built over decades.
The United States is India’s largest export destination, accounting for nearly 17 percent of goods including pharmaceuticals, textiles, jewellery, auto components, and engineering products. At a 50 percent tariff, many of these exports will lose competitiveness overnight.
Industries such as textiles and apparel, where margins are already tight, are expected to face severe pressure, potentially endangering millions of livelihoods. Gems and jewellery—a key driver of India’s export economy—also risk major declines. In the engineering and auto component sectors, factory slowdowns and job losses are anticipated.
Economists estimate that India’s $48 billion worth of exports to the U.S. could take a direct hit, shaving off 0.3 to 0.5 percentage points from India’s GDP growth. However, they also see this as an opportunity for India to accelerate “Make in India 2.0,” strengthen supply chains, and diversify export markets.
India’s manufacturing sector, currently stuck at 14 percent of GDP, must expand rapidly if the country is to withstand shocks of this magnitude, experts emphasized.
Recent Random Post:
Raj Nidimoru Ex-wife Reacts to Samantha Raj Nidimoru Wedding
Raj Nidimoru Ex-wife Reacts to Samantha Raj Nidimoru Wedding
