Trump's tariffs take effect: India faces 26% tax on exports

President Donald Trump's 26% Indian imports tariffs have taken effect, as part of a broader trade policy overhaul. The US president had announced the retaliatory tariffs on April 3, against nations with trade surpluses with the US.

Other affected nations are:

• Vietnam: 46% tariffs
• Taiwan: 32% tariffs
• South Korea: 25% tariffs
• Japan: 24% tariffs
•  European Union: 20% tariffs
• China: 104% total rate of tariff, with additional 50% tariff for Chinese imports

Global trade implications

The tariffs are intended to bolster US industry, but economists warn of broad effect on global supply chains, investor confidence, and diplomatic relations. China's economy, founded upon a system of assured ongoing growth, has caused the country to reassure its business community and assuage markets.

Effect on India

• Exemptions: Semiconductors, copper, and pharmaceuticals exempted, but other key export categories hit with tariffs
•  Mitigation strategy: Indian government in close touch with exporters, gearing up response
•  Bilateral trade agreements: India endeavouring to reach US-India Bilateral Trade Agreement

India's response

India is carefully balancing the implications of Trump's declaration, studying the opportunities that emerge from the shift in US trade policy. The Union commerce ministry is taking advice from stakeholders like industry and exporters to gauge the situation and protect the nation's interests. 

Potential Impacts

•  Export-Oriented Industries: India's manufacturing, pharma, and technology industries will be affected by the hike in tariffs.
• Drugs: Trump will announce tariffs on drugs, which will hit India and China, the world's largest producers of generic medications.