India’s Trade Minister, Piyush Goyal, has stated that the country will not “bow down” to the United States’ stiff 50% tariffs on Indian goods, instead focusing on attracting new markets.
Goyal emphasized India’s readiness to engage in free trade agreements while maintaining its stance against appearing weak. “We will continue to move together and capture new markets,” he said, underscoring the government’s commitment to boosting exports despite the tariffs imposed by the US.
The tariffs, which took effect recently, are part of the US’s efforts to pressure India over its purchases of Russian oil amid the ongoing conflict in Ukraine.
Goyal criticized the levies as “unfair, unjustified, and unreasonable,” highlighting the strain in US-India ties. Trade talks between the two nations have been challenging, particularly over issues like agriculture and dairy markets.
The US seeks greater access to these markets, while Indian Prime Minister Narendra Modi aims to protect India’s farmers, a significant voter bloc.
The impact of these tariffs is substantial, given that the US was India’s top export destination in 2024, with shipments worth $87.3 billion.
Analysts warn that the 50% duty is akin to a trade embargo, potentially harming smaller firms and leading to heavy job cuts. Exporters of textiles, seafood, and jewelry have already canceled US orders due to losses to rivals like Bangladesh and Vietnam.
The tariffs could significantly impact India’s exports, with 66% of its shipments to the US facing the 50% tariff. This may lead to a decline in India’s competitiveness in its largest export market, threatening billions in exports and thousands of jobs. Labour-heavy industries like textiles, jewelry, and seafood are most at risk.
In response to the tariffs, India is exploring new markets and considering retaliatory measures.
The government plans to release measures to support affected sectors and boost exports. Goyal expressed confidence that India’s exports will exceed 2024-25 numbers.
Meanwhile, Prime Minister Modi has emphasized the importance of strengthening India’s resilience against economic pressure.
In a related development, a US Court of Appeals has largely upheld a decision that found Trump’s universal tariffs on all US trading partners to be an overstep of his authority.
The court questioned the logic behind invoking the International Emergency Economic Powers Act to justify the move, claiming trade deficits constitute a “national emergency”. The Trump administration is expected to appeal to the Supreme Court.
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