US President Donald Trump has announced an additional 25% tariff on India due to buying oil from Russia. Along with this, a total of 50% tariff has been announced on India. Due to this, new tension has arisen between the two countries. After this decision, Indian exporters and industry are concerned about possible tremors and losses and are looking for measures to deal with it. In such a situation, the question arises that what does India have the break of tariff of America? How will India deal with it?
Indo-US Trade Relations and Current Status
America is India’s largest trading partner. India exports goods worth $ 86.51 billion to the US. These include major products include gem-ornaments, shrimp (shrimp), textiles and textiles. Recently, Trump said that the Indo-US bilateral trade agreement has now reached a state of stagnation. The Government of India has prepared a special export incentive mission of ₹ 20,000 crore to deal with commercial uncertainties. The Ministry of Commerce, MSME and Finance will conduct the mission together. It is planned to finalize it by August 2025 by finalizing it.
The mission will have 5 major components:
- Trade finance (export loan facility)
- Non-business finance (access to rules, standard and market)
- Getting brand India globally recognized
- Development of e-commerce and warehousing hubs
- Trading facility reform
Government’s attention on sector-specific demands
The government is considering various regional demands to promote domestic manufacturing. These include expanding existing schemes, introducing new schemes, simplifying compliance, diverse business. Experts suggest that the government start digital platforms and single window systems for MSME sector and exporters, so that they can get export loans, insurance and risk cover facilities.
The most impact on the textile sector
Trump’s tariff is expected to affect the textile industry the most. India’s $ 4 billion textile exports, including T-shirts and home textile, may be affected. Countries such as Bangladesh and Vietnam have been levied lower fees compared to India, which has increased competition. The government is preparing to add special measures for the textile sector by expanding the mission of ₹ 2,250 crore declared in the budget of FY 2025-26.
What are the options before India?
According to Hindustan Times report, India have two major options. One, discovering new export markets and reducing dependence on American market. Second, promoting domestic demand and empowering local manufacturing. It is also reported that India’s vast domestic market attracts economies around the world, and many countries are interested in free trade agreement with India.
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