US President Donald Trump’s 26 per cent tariff on Indian imports threatens key sectors like textiles, electronics, and gems and jewellery. Experts warned of economic disruptions and market volatility.
Indian exporters in textiles, engineering goods, electronics, and gems and jewellery are set to face significant challenges following US President Donald Trump’s announcement of a 26 per cent tariff on Indian imports. The move, part of a broader trade policy shift, is expected to disrupt India’s export-driven sectors and impact economic ties with the US.
Trump’s tariff policy: ‘America first’ to ‘America alone’
Ajay Bagga, a banking and international markets expert, criticized the decision, calling it a shift from “America First” to “America Alone.” He told ANI that these tariffs are based on exaggerated calculations, factoring in customs duties, alleged currency manipulation, and GST.
Sectors feeling the immediate heat
While India’s domestic industries remain largely insulated, exporters in textiles, engineering goods, electronics, and gems & jewellery will bear the brunt of increased costs. The metal sector saw immediate sell-offs, while pharmaceutical companies are in wait-and-watch mode as they anticipate sectoral tariffs.
Market reaction: Investors move to safe havens
The Indian stock market reacted sharply to the news, with investors moving funds into gold, the Japanese yen, the Swiss franc, and Japanese government bonds. Emerging market portfolio flows are also expected to take a hit as global uncertainty rises.
Economic pain on the horizon?
Bagga warned that uncertainty has now turned into a certainty of economic and market pain. He noted that initial reactions saw investors selling risk assets and seeking safer investment avenues.
With Indian exporters now facing higher costs and reduced competitiveness in the US market, businesses and policymakers will closely monitor how these tariffs impact trade dynamics in the coming weeks.
