US tariffs may lead to dumping by competing countries in India: CareEdge

ANI April 6, 2025 182 views

The United States is implementing significant tariff increases that could dramatically reshape international trade dynamics. CareEdge Ratings has highlighted potential risks of market dumping in various export sectors. The tariffs, ranging from 10% to 50%, will specifically impact India's exports to the US. These trade tensions could potentially restructure economic relationships between the US and its trading partners.

"The United States will match tariffs imposed by other countries to ensure fair trade" - President Trump
New Delhi, April 6: The imposition of high reciprocal tariffs by the US on other competing nations raises the possibility of increased dumping by those nations in India, as well as in other export markets, which could negatively impact certain sectors, CareEdge Ratings said in a report.

Key Points

1

US raising tariffs to 26% on Indian imports may trigger market shifts

2

Potential dumping risk in electronics, textiles, and other sectors

3

India's exports to US valued at $77.5 billion in 2023-24

4

Competitive nations like Vietnam face higher tariff rates

According to the report ' Sectoral Impact of US Reciprocal Tariff: Neutral to Negative, ' the expected direct impact of US reciprocal tariffs would vary, with no impact expected on pharmaceuticals since they are exempt from reciprocal tariffs for now.

According to the rating agency, the impact is expected to be largely neutral for electronics, textiles, agricultural products, chemicals, and automobiles and parts. At the same time, it would be negative for gems and jewellery.

During 2023-24, India's aggregate merchandise exports to the US stood at USD 77.5 billion compared to its imports from the US at USD 42.2 billion.

Out of India's total exports to the US, the sectors in descending order of value are electronics, textiles, pharmaceuticals, gems and jewellery, agricultural products, chemicals and automobiles and parts.

Until now, the US has been charging an average tariff of 3.50 per cent on imports of goods from India with respect to the above-said sectors, which is now being increased uniformly to 26 per cent in the form of a reciprocal tariff.

Reciprocal tariff imposed by the US on other nations who are India's major competitors in most of the above sectors is higher than us - Vietnam at 46 per cent, Bangladesh at 37 per cent, China at 34 per cent, Taiwan at 32 per cent, Indonesia at 32 per cent and Pakistan at 29 per cent, which, according to rating agency, augurs well for key export sectors of India.

Since assuming office for his second term, President Trump has reiterated his stance on tariff reciprocity, emphasising that the United States will match tariffs imposed by other countries, including India, to ensure fair trade.

On April 2, the US President issued an executive order on reciprocal tariffs, imposing additional ad valorem duties ranging from 10 per cent to 50 per cent on imports from all trading partners. The baseline duty of 10 per cent will be effective from April 05, 2025, and the remaining country-specific additional ad valorem duty will be effective from April 09, 2025. The additional duty on India is 26 per cent.

Reader Comments

P
Priya K.
Interesting analysis! The tariff differences between India and competitors like Vietnam/China could actually give our exporters an advantage. Hope the government capitalizes on this opportunity 🤞
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Rahul S.
The gems and jewellery sector is going to take a hit. My cousin works in Surat's diamond industry and they're already worried about dumping from other countries. Tough times ahead.
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Anjali M.
While the analysis is thorough, I wish they'd provided more concrete examples of how dumping might occur. The report seems to just raise the possibility without much supporting data. Still valuable though!
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Vikram J.
Pharma sector breathing a sigh of relief! 💊 This exemption is crucial - we export so many generic medicines to the US. Smart move by negotiators to keep this out of the tariff war.
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Sanjay P.
The timing is interesting with the new US administration. Wonder if this will push India to strengthen trade ties with other markets like EU and Africa as a hedge against US policy changes.
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Neha T.
Textile industry worker here 👋 The 26% tariff seems high but compared to Bangladesh's 37%, we might actually gain some business. Fingers crossed for more orders coming our way!

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Tags:
US Trade Policy India Exports Tariff Reciprocity CareEdge Ratings International Trade Economic Impact
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