US President Donald Trump on Tuesday stated he would considerably elevate tariffs on India throughout the subsequent 24 hours, stating that whereas India is about to supply the US “zero tariffs” beneath a commerce deal, it will not be adequate resulting from its buy of Russian oil.
“India has the very best tariffs of any nation. We do little or no enterprise with India as a result of their tariffs are so excessive. So, India has not been an excellent buying and selling associate — they do a whole lot of enterprise with us, however we don’t do a lot enterprise with them. So, we settled on 25 per cent [tariffs], however I feel I’m going to lift that very considerably over the following 24 hours, as a result of they’re shopping for Russian oil, they’re fuelling the battle machine. If they’ll do this, I’m not going to be very comfortable,” Trump stated in an interview with CNBC.
“Now I’ll say this: India went from the very best tariffs ever — they may give us zero tariffs. And they’ll allow us to go in. However that’s not adequate due to what they’re doing with Russian oil — not good,” Trump added, whereas responding to a query on sticking factors.
When requested in regards to the worth of oil if Russian provides had been faraway from the market, Trump stated he was not involved about costs, because the US is drilling at ranges by no means seen earlier than.
Score company ICRA on Monday revised India’s FY26 GDP progress forecast downward from 6.2 per cent to six.0 per cent, citing US tariffs and uncertainty round potential penalties as key dangers. Regardless of a sturdy commerce surplus with the US — which rose to $41 billion in FY2025 from $21 billion in FY2015 — India’s aggressive edge could possibly be eroded within the absence of a bilateral commerce decision, ICRA stated.
The company recognized textiles, auto elements, tyres, chemical compounds, agrochemicals, and lower & polished diamonds (CPD) because the worst-hit sectors. Then again, prescription drugs, petroleum merchandise, and telecom devices stay comparatively steady, in keeping with the report.
“The pharma sector, with 37 per cent of its exports directed to the US, has to this point been exempted from the brand new tariffs. The telecom devices sector, the place the US kinds over 40 per cent of India’s export base, faces negligible impression as competing nations have solely barely decrease tariffs. Petroleum product exports are additionally excluded from the tariff hikes, although India’s reliance on discounted Russian crude — which has shrunk in FY2025 — could have oblique value implications,” the report stated.
Story continues beneath this advert
The report additionally stated there are indicators of export re-routing as Indian exporters search to keep up entry to the US market. CPD exporters, for instance, could shift to commerce hubs akin to Belgium and the UAE, whereas corporations in sectors like auto and tyres try to diversify into the EU, UK, and Asia-Pacific markets, although it will take time, it stated.
“The chance of commerce being redirected to nations like Vietnam and Indonesia is excessive, given their decrease tariff burden and rising share in US imports,” it added.
ICRA stated that except a bilateral commerce settlement is swiftly concluded, the present tariff construction may considerably alter India’s export trajectory in FY2026 and past. The excessive sectoral dependence on US markets, coupled with tariff asymmetry, poses a severe problem to India’s commerce competitiveness, the report stated.
© The Indian Categorical Pvt Ltd