03/04/2025
1. Pharma won’t be affected : Indian drugs companies have got a reprieve with the pharma sector left untouched by the 10 percent standard tariff imposed on all imports to US and the 26 percent duty that will now be put on all Indian goods, writes R Sree Ram.
2. Gems and jewellery will be hit, but not listed companies: This sector accounted for $9.9 billion or roughly Rs 80,000 crore of exports to USA last year and it will take a hit because effective tariffs in this sector have gone up by 20 percent (from 5-5.7% to 26%). But the Trump impact will be limited to unlisted companies, which could see job losses. Among listed jewellery companies, only one - Goldiam, which has significant earnings from US exports - will be majorly impacted, reports Bharat Gianani. Even so, the Trump effect on this company would be restricted because most of its revenues are from lab diamonds, whose prices will go up less than natural diamonds.
3. Textiles fly high: US is India’s largest textile buyer (accounting for about $10 billion of $36 billion textile exports last year) and India’s textile makers may emerge stronger despite higher tariffs. This is because 26% tariffs put on Indian textile are higher than those imposed on rivals such as Bangladesh (37%), Vietnam (46%) and China (52%), write Anant Chaudhary and Varsha Bang.
4. Auto firms skidding into trouble: Auto companies have hit a speed-breaker with 25% tariffs on foreign automobiles and auto parts. Tata Motors will be hit - as over one-third of Jaguar Land Rover sales come from USA - while Maruti Suzuki and Mahindra and Mahindra will be relatively insulated because of their strong focus on local sales and production. Auto part makers export about $3.67 billion worth of goods to US in H1FY25 and many with large exposure to US - such as Sona BLW Precision Forgings and Bharat Forge - will be affected, write Nitin Agrawal and Kanchi Shah.
5. Other’s pain may be India’s gain: Overall, about 20 Indian sectors - such as electronics - earn over 30% of their revenues from US but many may only be moderately impacted because the tariff hikes on them are much more than those imposed on rival countries. For a comprehensive sector-by-sector listing of whose will gain, lose or remain unaffected, check out Ishaan Gera’s comprehensive sectoral Trump report card for India. Also read Ishaan’s second piece analysing why Indian exports may benefit because of higher duties on Vietnam, Bangladesh, Sri Lanka and Pakistan.
Shweta Punj reports from Delhi’s corridors of powers that India is also pinning its hopes on the wider India-US free trade agreement that is being negotiated. Indian negotiators hope to convince Trump to lift some of the new tariffs through exemptions possible under Section 4(c) of his executive order, which allows for tariff reductions if trade issues are addressed.
India in the global game - and how it has changed: Beyond the numbers, do read Manas Chakravarty’s scathing obituary mourning the demise of the rules-based international order after MAGA as well as Sanjiv Shankaran’s sharp critique of the resort to trade deficits as 'weapons of mass destruction’ and why this could have unintended consequences.
Note: Above analysis is done by Nalin Mehta Money Control
