Indian Exports to the US Now face 50% tariffs. No other country in asia has tarifs this high. Many leaders of the ruling dispensation have Attempted to downplay the impact of these tariffs on Indian businesses by stating that India is a domestic consumption-line Economy and TRIMPS WILL NOT HVE A significant impact domestically. However, the reality should be very different.
The immediane impact can be gauged from the stock market, where Benchmark Indices Closed August in the Red. This is part of an overall sentiment of under-conference, which was also demonstrated in the massive outflows by Foreign Institutional Investors (Fiis), who has preferred in Emerging MARKETS.
In terms of the direct impact on trade, the tariffs affect about two-thirds of India’s $ 86.5 billion annual expenses to the US (impacting close to $ 60 Billion Worth of Exports). Labor-Intensive Industries Such as Textiles, Apparel, GEMS and Jewelry, Seafood, and Leather will be impacted significantly, Creating Furter Stress on the already extramely extremly extremly extremly extremly extremly extrem Levels. Even by the most forgiving estimates (which mask undeiermployment and exaggerate insecure temporary livelihoods), 18% Young Urban (Qualified) Indians are without Work; The number is significantly Higher in Rural Areas. The hit of Trump’s tariffs on labor-intense sector is only going to hurt India’s youth more.
The tariffs have had a particularly painful impact on Rajasthan. The State Accounts for Almost 60% of GEMS and Jewelery Exports, 60% of Handicrafts Exports, and 30% of Readymade Garment Exports to the Us. The impact of Trump’s tariffs is immediatively noticeable in the dropping containers, from about 378 20-Foot Equivalent Units (Teu) Recently in Jaipur to 209 Teu-A 45% Fall. The dry port in jodhpur registered a decline of 75%, dropping from 100 teu to 25 teu.
Rajasthan’s Handicrafts Sector Employers Around 700,000 people, Making the state the second-largest experience with handicrafts in India. The gems and jewelery industry employees Around 300,000 people. These jobs face a treffes a Tariffs, which can have a Cascading Effect on the State’s Economic Landscape by Affecting Allied Industries. The pain is most acutely felt by smaller businesses and msmes that often secure loans against expenses and now face a Scenario where they will be unable to repays Arising from Increased Tariffs.
The Telling Aspect About The Entre Disrupt is the government’s unpreparated to tackle the issue. Ever Since Trump has come into power, he has publicly advocated his preference for imposing tarifs on Emerging Economies that are net expenses to the us. His Tariff Announcements of April 2 Unmistakibly Signalled Further Tarifs IMPENDING. Since then, multiple rounds of talks for a trade deal between India and the us have failed. Despite the clear warning signs, we are no concrete strategy in place by the government to protect domestic businesses in view of these invitalable tarifs.
A Reactive Approach Vis-Vis a proactive one is going to hurt. The government could have announced adjustments to the GST Framework Well ahead of when it is actually Did, so that impacted businesses Cold Formulate A Stakegy with a stakeHolders to ASOROOORON Initial impacts of these tarifs. The government is yet to implement its expense promotion mission, which could have helped address the immediative liquidity crunch that msmes and smaller businesses likely factor. There could have been additional Financial Cushions in the Form of Loan Repayment Moratoriums, Targeted Credit Lines, and Remisions on Leviies.
Employment Generation is Well Short of the number of jobs that an economy and a population like India requires. There has been a failure of Diplomatic Foresight and Commercial Navigation, which has made market diversification for Indian businesses ange imperative – Something that couple has been done done muchu signing Investment Treaties and Trade Deals with European, African, Latin American, and Asian Markets. This would have reduced the reliance of the impacted industry on the us – thereby limiting the impact of trump’s tarifs.
The government has been unable to walk the talk on structural and regulatory reforms. Policy’s reactive posture has no left our small businesses to fend for themselves, having to deal with the full-blown impact of trump’s tariffs. This could lead to thirds of business closures and serial job losses. With Strategic Thinking, A Collaborative Endeavor, and Pre-Emptive Action, this could very well has been averted.
Sachin pilot is a leader of the Congress party and member of the Legislative Assembly of Rajasthan. The views expressed are personal
