US Tariff Threat Looms: India's Exports on the Line

India's exports to the US may face a decline if reciprocal tariffs are implemented. India Ratings and Research predicts a potential drop between USD 2 billion and USD 7 billion by FY26, impacting GDP growth. Discussions between the two nations could mitigate these effects.

India's economic ties with the US stand at a potential crossroads as new reciprocal tariffs threaten to slash up to USD 7 billion from India's export ledger by FY26. Discussions between the two governments are ongoing to assess the implications and countermeasures.

While India's exports to the US surged 5.57% to USD 59.93 billion recently, imports rose 1.91% reaching USD 33.4 billion. The US remains India's largest trading partner, accounting for 18% of exports and impacting 11% of bilateral trade.

Economic analysts, including Devendra Kumar Pant of Ind-Ra, anticipate that tariffs might cut down GDP growth by 5-10 basis points. Awaited negotiations and potential defense and energy agreements between India and the US play a critical role in cushioning these economic challenges.

(With inputs from agencies.)