According to a report by the National Bank of India, US tariff reciprocity is expected to have minimal impact on India’s exports.
The report highlights that even if the US imposes higher tariffs in the 15-20% range, the overall decline in Indian exports to the US is estimated to be around 3-3.5%. “Our estimates show that even at 15-20% imposed by the US, the overall incremental tariff levels limit the impact on exports to the US only in the range of 3-3.5%. It’s there.
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According to the report, experts believe this impact could be offset by diversifying India’s strategic exports, increasing value additions, and investigations into new trade routes. The US is India’s highest export destination, accounting for 17.7% of total exports for the 2023-24 fiscal year. However, India’s export strategy has evolved to reduce dependence on any market. With growing trade relations in Europe, the Middle East and other regions, India is working to strengthen its supply chain network to ensure export stability. US tariffs on Indian goods have been relatively stable over the years, but India’s tariff policy has been more dynamic.
The report highlighted that US tariff rates on Indian goods will decline slightly to 3.83% in 2022 after an increase from 2.72% in 2018 to 3.91% in 2021. The percentage in 2018 was 15.30% in 2022. This change in tariff structure reflects India’s more assertive trade policy aimed at balancing trade relations while protecting domestic industries. India is focused on adding value to exports, moving from raw materials to finished and high value products.
This strategy not only strengthens export revenues, but also mitigates the potential impact of tariff hikes by ensuring that Indian goods remain competitive in the global market. The US reduces logistics costs and improves efficiency. This restructured supply chain approach is expected to strengthen India’s position in international trade despite global uncertainty.
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Overall, the US could introduce higher tariffs, but India’s aggressive trade policy, export diversification and supply chain restructuring will mitigate the impact and ensure stable exports in the long run. It is expected to ensure growth.
