By Saurabh Shukla:

New Delhi:Economic experts are apprehensive that the coming months will remain full of uncertainty due to the tariffs imposed by America. Owing to these uncertainties, not only will there be a continued turmoil in the stock market, but the dynamics of import and export may also get disrupted, they stated.

According to Arun Kumar, America is openly flouting World Trade Organization (WTO) rules regarding tariffs. The US aims to increase employment for its citizens by focusing on boosting domestic production, while making imports from other countries more expensive. However, this strategy is economically illogical. He said that Goods that America previously imported at low cost will become significantly more expensive if produced domestically, which will lead to inflation. "As labour cost in the US is very high compared to India and China, this will lead to increase in manufacturing cost of any product which is locally produced there. The tariffs imposed as part of this strategy will create economic inequality worldwide, increasing the likelihood of an economic recession," he said.

In an exclusive conversation with ETV Bharat, Arun Kumar, a retired Professor of Economics at Jawaharlal Nehru University and an expert in economic matters, said that India should increase its focus on building extensive business relations with America as well as other countries.

Research Report On US Tariffs

According to data, in 2024, India exported $89.81 billion worth of goods to the US (Trade Data as reported by USA), but these exports could decline by approximately $5.76 billion—a drop of 6.41%—as a result of the new trade measures in 2025. Several key product groups are likely to see reductions. Exports of fish and crustaceans may fall by 20.2%, iron or steel articles by 18.0%, and diamonds, gold, and related products by 15.3%. Vehicle and parts exports are projected to drop by 12.1%, while electrical, telecom, and electronic products may decline by 12.0%. Other categories such as plastics and articles thereof (-9.4%), carpets (-6.3%), petroleum products (-5.2%), organic chemicals (-2.2%), and machinery (-2.0%) are also expected to be negatively impacted.

However, there are pockets of opportunity amid the disruption. India could see modest export gains in sectors where the US has raised tariffs on competing countries. These include textiles made up (4.2%), apparel (3.2%), ceramic products (3.1%), albuminoidal substances, glues, and enzymes (3%), inorganic chemicals (3%), and pharmaceuticals (2.1%). While the overall effect of the new tariffs points toward a decline in trade, India’s competitive position in select product segments may help cushion some of the losses, opined Kumar.

Meanwhile, the Global Trade Research Initiative (GTRI) has also conducted a study to assess the impact of the newly announced US tariffs on India's merchandise exports. Using detailed trade data and tariff schedules, the analysis estimates that India could see a decline of $5.76 billion, or 6.41%, in exports to the United States in 2025. The study evaluates sector-specific exposure, changes in tariff rates, and competitive dynamics involving key players like China, Mexico, and Canada. It also highlights sectors where India may gain or lose ground, offering a nuanced picture of the challenges and opportunities emerging from the revised U.S. tariff regime.

Trade War Within The Countries!

He, however, has expressed concern saying, "Given the restrictions on exports to America, if China begins dumping goods in India and India responds by imposing tariffs, a global trade war within the countries could erupt. Such a situation would become increasingly dangerous from an economic standpoint."

Arun Kumar is of the opinion that while continuing business with America, India should now explore shifting its focus towards other countries, especially the BRICS nations. India should explore new ways to increase trade, he said.

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