'Not As Severe As Feared': Govt Sources Say US Tariffs Unlikely To Have Major Impact

New Delhi: As the US imposes a hefty 50% tariff on Indian goods, effective August 27, the Indian government sources have sounded a note of caution and optimism, suggesting that the impact may not be as severe as initially feared. US President Donald Trump's move, which is aimed at pressuring India over its purchase of Russian oil, the diversified nature of Indian exports, the experts argued, will help cushion the blow. 

The tariffs, announced by Trump, will affect Indian exports to America, excluding a few sectors. According to government sources, the impact of the tariffs is unlikely to be as severe as feared, due to the diversified nature of Indian exports. The government has assured that there is no need to panic regarding exports, as communication lines between India and the US remain open to resolve the issue. The situation has been described as a temporary phase in a long-term relationship between the two countries. The government sources have also indicated that India's economy is resilient and can absorb the impact of the tariffs.

The Trump administration's decision to impose a 50% tariff on Indian goods has raised several questions, with many exporters scrambling to assess the possible damage. The tariffs, imposed due to India's continued purchase of Russian oil, will affect a chunk of India's exports to the US. As per experts, sectors such as textiles, gems and jewellery, shrimp, carpets, and furniture are expected to bear the brunt of the tariffs.

According to government sources, the impact of the tariffs will be mitigated by the diversified nature of Indian exports. While some sectors may face challenges, others may be more resilient. The government's confidence stems from India's growing trade ties with other countries and its efforts to boost exports to new markets. As per information, the Commerce Ministry has identified nearly 50 countries where India can increase its exports, particularly in items such as textiles, food, processed items, leather goods, and marine products.

Indian Industry's Perspective

Meanwhile, amidst the US tariffs, the industry bodies have expressed mixed views on the tariffs. FICCI President Harsha Vardhan Agarwal believed that the Indian economy continues to show resilience and strength despite global headwinds. He credits India's large and vibrant consumer base, robust macroeconomic fundamentals, continued economic reforms, and enterprising businesses for this resilience. PHDCCI President Hemant Jain notesd that while global trade tensions pose challenges, Indian exporters are actively expanding into ASEAN, EU, and African markets, reducing dependence on traditional partners and sustaining long-term competitiveness.

US Treasury Secretary's Optimism

In a positive development, US Treasury Secretary Scott Bessent has indicated that the two countries may come together soon to resolve the issue. Bessent stated that Trump has good ties with Prime Minister Narendra Modi and believed that the two countries will eventually find a way to work together. "There are many layers to this situation. Still, India is the world's largest democracy, and the US is the world's largest economy. At the end of the day, I believe the two countries will come together," Bessent said.

However, further developments in the ongoing trade negotiations are awaited.