Today's Edition
Mumbai (AFP)
Indian exports to the United States will face some of the highest tariffs in the world this week, barring a last-minute reversal from President Donald Trump.
Trump has tied issues of war and peace to trade, threatening to slap 50% duties on New Delhi for its continued purchases of Russian oil.
Trump issued a three-week deadline on August 6, which is expected to take effect on Wednesday morning in India.
How bad will it be?
The United States was India's top export destination in 2024, with shipments worth $87.3 billion.
Economists estimate tariffs could shave 70 to 100 basis points off India's GDP growth this fiscal year, dragging growth below six percent, the weakest pace since the pandemic.
Exporters in textiles, seafood and jewellery are already reporting cancelled US orders and losses to rivals such as Bangladesh and Vietnam, raising fears of heavy job cuts.
A small reprieve: pharmaceuticals and electronics, including iPhones assembled in India, are exempt for now.
S&P estimates exports equivalent to 1.2 percent of India's GDP will be hit, but says it will be a "one-off" shock that "will not derail" the country's long-term growth prospects.
What can India do?
New Delhi has sought to bolster its economy while deepening ties with both BRICS partners and regional rivals.
Domestically, Indian media reports that the government is working on a $2.8 billion package for exporters, a six-year programme aimed at easing liquidity concerns.
Modi has also proposed tax cuts on everyday goods to spur spending and cushion the economy.
