Key highlights of the US tariff impact

On 2 April 2025, which the US administration refers to as the ‘Liberation Day,’ the US has introduced reciprocal tariffs targeting nearly all trading partners, marking a significant shift in trade policy to prioritize domestic industries and rebalance global trade.

We present the key highlights:

• India faces a considerable increase in its export costs to the US. Yet, when compared to countries like China and Vietnam, India’s position remains relatively advantageous, providing a unique opportunity for India to strengthen its presence in the US market, particularly in sectors like Telecommunications and Textiles.
• Despite challenges faced in sectors like Textile, Gems and Jewellery, there is wide scope for India to broaden its presence in certain sectors exempt from reciprocal duties.
• Exemption from reciprocal duties has been provided considering the critical needs of various countries for these materials and to ensure that specific essential resources remain unaffected by additional tariffs. The excluded sectors include products such as essential minerals, metals, pharmaceuticals, specified chemicals, and semiconductors.
• India’s push for a Bilateral Trade Agreement (BTA) with the US to secure concessional tariff rates and maintain its trade competitiveness remains a key tool.

Please note that this is a developing issue, and the analysis will evolve subject to new information.