55pc of Total Value of Indian Exports to US to Face a Cumulative 25pc Tariff From August 7

New Delhi: With Washington’s unprecedented move to impose a 50 per cent tariff on Indian goods, the Union finance ministry on Monday has estimated that about 55 per cent of the total value of merchandise exports to the US will now face a cumulative 25 per cent tariff from August 7. However, the government said that it is working on various measures to boost India’s exports, including targeting 50 countries in regions such as the Middle East and Africa.

In a written reply to a question in the Lok Sabha, minister of state for finance ministry Pankaj Chaudhary said that about 55 per cent of India’s total merchandise exports to the US will be subject to 25 per cent reciprocal tariff. “The government attaches utmost importance to protecting and promoting welfare of farmers, entrepreneurs, exporters, MSMEs, and will take all necessary steps to secure our national interest,” he said.

However, a commerce ministry’s source said that the government is working on measures to boost India’s exports, including targeting 50 countries in regions such as the Middle East and Africa, amid the heavy tariffs imposed by the US on Indian goods. “These 50 countries account for about 90 per cent of India’s exports. The ministry is working on four pillars including export diversification, import substitution, and export competitiveness,” the source said.

Elaborating the ministry’s strategy, the official also said that the commerce ministry was already focusing on 20 countries and now 30 more have now been included in the strategy. “Detailed analysis is underway on these pillars. We are working product by product in almost all sectors,” the source added.

The finance ministry in response to another question in Parliament also stated that the actual impact on exporters would depend on factors such as product differentiation, quality, existing contracts, and market demand resilience. “Key sectors likely to be most affected include textiles, footwear, and jewellery,” the ministry noted.

However, the minister also said that a combination of different factors, such as product differentiation, demand, quality, and contractual arrangements, would determine the impact on India’s exports. “A reciprocal tariff at the rate of 25 per cent is proposed to be imposed on certain goods exported from India to the USA starting from August 7,” he informed Parliament.

The government is weighing all options of countermeasures such as diversifying export markets, offering targeted subsidies, and fast-tracking trade agreements with other partners. Analysts, however, are of the view that while the short-term pain could be significant, reducing over-reliance on the US may strengthen India’s long-term export position.

Acknowledging the potential disruption, the ministry further noted that the department of commerce is holding active consultations with exporters, MSMEs, and trade associations to assess the damage and formulate targeted responses. “The government attaches utmost importance to protecting and promoting the welfare of our farmers, entrepreneurs, exporters, and MSMEs,” the ministry said.