US rates can have an influence

New -Delhi, April 2 (PTI) goods from sectors, including agriculture, precious stones, chemicals, pharmaceuticals, medical devices, electricity and machinery, may have an impact on the imposition of reciprocal rates on Indian products. They said that these sectors may experience additional customs duties of the Trump administration due to the high tariff difference or gap, which is the difference between the US and India import tax on a product. At the broad sector level, the potential tariff gaps between India and the US vary in the sectors. The gap is 8.6 percent for chemicals and pharmaceutical products; 5.6 percent for plastic; 1.4 percent for textiles and clothing; 13.3 percent for diamonds, gold and jewelry; 2.5 percent for iron, steel and base metals; 5.3 percent for machinery and computers; 7.2 percent for electronics; and 23.1 percent for cars and autoc components. “The higher the tariff gap, the worse is a sector,” an exporter said. US President Donald Trump said the tariff announcements, which are scheduled early Wednesday (India), will amount to a ‘liberation day’ for the US. According to an analysis of the Think Tank Global Trade Research Initiative (GTRI), the loudest hit sector would be fish, meat and processed seafood, with $ 2.58 billion in 2024, with a tariff difference of $ 27.83. Shrimp, a large export to America, will become significantly less competitive due to the introduction of US rates. “Our exports already have antidumping and counteracted duties in the US. The additional increase in rates will make us uncompetitive. From India’s total shrimp exports, we send 40 percent to America,” Kolkata-based seafood exporter and managing director of Megaa Moda Yogesh Gupta said. He said Indian exporters could get some relief if the US would impose similar rates on competing countries – Ecuador and Indonesia. India’s processed food, sugar and cocoa exports may also face heat as the tariff gap is 24.99 percent. Exports was $ 1.03 billion last year. Similarly, grain, vegetables, fruits and spices ($ 1.91 billion) have a 5.72 percent tariff difference in between. Dairy products, with exports worth USD 181.49 million, can be “severely” affected by a 38.23 percent equator, “which makes Ghee, butter and milk powder cost and reduce their market share in the US,” said GTRI founder Ajay Srivastava. The other products that can be affected include edible oils (USD 199.75 million export and 10.67 duty gap); alcohol, wines and spirits (USD 19.2 million export and 122.10 percent tariff difference); Living animals and animal products (USD 10.3 million exports and 27.75 percent gap). Srivastava said tobacco and cigarettes, whose exports were valued at USD 94.62 million in 2024, cannot be affected, as the US already imposes 201.15 percent rates, creating a negative tariff difference (-168.15 percent). In the industrial goods segment, sectors can be influenced by US duties, including pharmaceutical products, jewelry and electronics. “We keep our fingers crossed because of the unpredictability of the Trump administration on the tariff front. But if it is imposed, it can initially affect, but not in the long run. The whole burden, although on US consumers,” said Mumbai exporter Sk Saraf. The pharmaceutical sector, India’s largest industrial export, worth USD 12.72 billion in 2024, has a 10.90 percent tariff difference, increasing the cost for generic medicine and specialty medicine. Diamonds, gold and silver, with USD 11.88 billion exports, could possibly see a 13.32 percent tariff increase, which increases jewelry prices and reduces competitiveness. Similarly, electrical, telecommunications and electronic exports worth USD 14.39 billion have a 7.24 percent rate. According to the GTRI, machinery, kettles, turbines and computers, with a value of USD 7.10 billion from USD, can see a 5.29 percent tariff increase, affecting the export of India’s engineering. “Chemicals (exclusive pharmaceuticals), exports worth USD 5.71 billion, could be influenced by a 6.05 percent tariff, reducing US demand for Indian specialty chemicals,” said Ajay Srivastava, founder of GTRI. Rubber products, including tires and belts, shipping $ 1.06 billion, could face a 7.76 percent tariff, while paper and wood articles (USD 969.65 million) could have a 7.87 percent tariff. “Ceramic, glass and stone products, with $ 1.71 billion export, will have an 8.27 percent tariff, which affects demand. Shoes, with USD 457.66 million export, have a high tariff difference of 15.56 percent,” he added. However, Srivastava said that reciprocal rates may not be exactly the same as the tariff difference, as the US indicated that they also cannot take into account non-tariff barriers, VAT (GST) and the effects of the currency in its reciprocal tariff policy.