India’s shock of $ 7 billion with tariff war? Learn what will be the effect on the economy and your pocket!
Indian economy and trump tariff: The potential tariffs imposed by the US in the global trade scenario have raised India’s concerns. According to a recent estimate of City Research, if these tariffs apply, India may suffer a major loss of $ 700 million ($ 7 billion) annually. This is not just a figure, but the ability to move many important columns of the economy. Also Read: Rahul Gandhi said, India a ruined economy, Modi will do what Trump will say
How deep is the tariff wound? Economists believe that it would be wrong to see this tariff limited to a rate of only 25%. It also includes a potential additional penalty of 10%, leading to the total tariff rate to 35%. This 25% base rate and 10% penalty will remain in force as long as India will import oil from Russia. That is, it is not just a commercial barrier, but also the result of a geopolitical pressure.
Straightforward and indirect attack on the economy : This loss of $ 7 billion is only an initial estimate. Its first and direct impact will have on the profits of exporters and traders. But its indirect impact can be much wider and worrying.
Employment threat: When exports decrease, production is low, which stops generating new employment opportunities and can also cause crisis on existing jobs. The result of this may be that recently, people above the poverty line can be pushed to the same side.
Reduction in consumption: Lowering employment reduces the purchasing power of people, which reduces consumption in the market. It acts like a vicious cycle, which can slow down overall economic growth. Also Read: Trump Tariff on India: Donald Trump imposed 25 percent tariff on India, what did Modi government say
Small businessmen will break the back: Small artisans and traders have an important role in India’s export sector. Tariff will have the deepest effect on them, as they do not have resistance -like resistance.
Which sectors will be the most affected? Some major sectors will directly come under the purview of this tariff:
James and Jewelery Sector: India exports US $ 11.88 billion annually to the US. States like Gujarat, Rajasthan and Maharashtra, which are hubs of this sector, will be badly affected. Small artisans and jewelers will be most vulnerable to it.
Textile Industry: India exports about $ 4.93 billion textile to the US. India and Bangladesh’s textile trade may shift to Vietnam due to America’s business deal with neighboring countries like Bangladesh and Vietnam. The employment of a large number of women working in this sector will also have a profound impact.
Telecom and Electronics: India exports US $ 14.39 billion mobiles, telecom equipment and electronic devices to the US. It is feared that companies like Apple, who were investing in India, may now rethink their expansion plans due to tariffs.
Automobile and Chemical: The effect of tariff on these areas is also unavoidable. It will also have an impact on subsidiary industries such as steel and aluminum, affecting both production and employment.
What is a ray of hope? The good thing is that bilateral talks are going on between India and America regarding the trade treaty. India is in trade surplus with the US, that is, we import less than what we export. Even if 25% tariff is applied, the surplus of $ 45 billion will be reduced.
The path ahead: Tariff may have far -reaching effects on India’s economy. This will not only affect exports, but will also affect employment, consumption and overall economic stability. Especially small businessmen, artisans and women can be hit by it. In such a situation, the government and policy makers will have to take quick and effective steps to reduce this loss and keep the economy stable. Everyone’s eyes will remain on the outcome of business talks.
