Manas Dasgupta
NEW DELHI, Aug 7: In keeping with the government’s stand that all decisions regarding additional tariffs imposed by the US president Donald Trump on imports from India, the Centre is expected to prioritise support measures for sectors like textiles and chemicals which would be severely impacted by the US tariff hike, industry sources said on Thursday.
The issues were discussed in the commerce ministry’s consultations with exporters from the textiles and chemicals sectors to assess the impact and explore possible support measures, they added. They said the ministry was working on the export promotion mission, announced in the Budget.
The mission is expected to feature components, including easy credit schemes for MSMEs, e-commerce exporters, facilitation of overseas warehousing, and global branding initiatives to tap emerging export opportunities. The government on February 1 announced the setting up of the mission with an outlay of Rs 2,250 crore.
The U.S. began officially levying higher taxes on imports from dozens of countries on Thursday four months after Mr Trump first announced plans to impose tariffs on most of the world while seeking new trade agreements across the board.
The White House said starting just after midnight goods from more than 60 countries and the European Union would face tariff rates of 10% or higher. Products from the European Union, Japan and South Korea will be taxed at 15%, while imports from Taiwan, Vietnam and Bangladesh will be taxed at 20%. Mr Trump also expects places such as the EU, Japan and South Korea to invest hundreds of billions of dollars in the U.S.
In a post on Truth Social, Mr Trump wrote in all capital letters, “It’s midnight! Billions of dollars in tariffs are now flowing into the United States of America!” Mr Trump imposed a 25% tariff on India as a part of the ‘reciprocal tariff’. But, Indian goods could also be subject to an additional 25% tariff additionally from August 27 because of an executive order Mr Trump signed on Wednesday that seeks to penalise India for purchasing oil from Russia.
While the stock markets weathered the initial Trump tariff storms with Sensex and Nifty closing marginally higher, gold prices rallied Rs 3,600 to hit a record high of Rs 1,02,620 per 10 grams in the national capital on Thursday as investors turned to safe-haven assets after the US administration announced a 25 per cent additional tariff on Indian imports. According to the All India Sarafa Association, the precious metal of 99.9 per cent purity had closed at Rs 99,020 per 10 grams on Wednesday.
In the national capital, gold of 99.5 per cent purity rallied by Rs 3,600 to hit a lifetime high of Rs 1,02,200 per 10 grams (inclusive of all taxes) on Thursday. It had settled at Rs 98,600 per 10 grams in the previous market close. “Gold prices have risen to the upper end of the weekly range on Thursday, driven by renewed trade concerns that have increased demand for traditional safe-haven assets.”
Gems and jewellery exporters’ body GJEPC on Thursday urged the government to bring in immediate policy reforms to support the industry, which is facing challenging times due to a steep 50 per cent tariff imposed by the US on all Indian goods.
The United States is the largest market for Indian gems and jewellery sector, accounting for over USD 10 billion in exports, nearly 30 per cent of the industry’s total global trade, according to GJEPC (Gem and Jewellery Export Promotion Council) chairman Kirit Bhansali.
US President Donald Trump’s announcement of a sweeping 50 per cent tariff on all Indian goods is a deeply concerning development and the move will have far-reaching repercussions across India’s economy, disrupting critical supply chains, stalling exports, and threatening thousands of livelihoods, he said.
In the stock market, the benchmark equity indices Sensex and Nifty staged a comeback on Thursday mainly due to buying in the last hour of trade, even as U.S. President Donald Trump slapped an additional 25% duty on Indian goods, which weighed on investor sentiment.
Rebounding around 926 points from the day’s low, the 30-share BSE Sensex edged higher by 79.27 points or 0.10% to settle at 80,623.26. The index traded in the red for most of the session and hit a low of 79,811.29. However, fag-end buying helped recover losses and touch a high of 80,737.55.
There would be no impact on the USD 23 billion-JSW Group’s business due to the 50 per cent tariff imposed by the Trump administration, but sentiments in India may be hit, Jindal Cements MD Parth Jindal said on Thursday.
Terming the imposition of additional tariffs of 25 per cent by the Trump administration on Wednesday, Jindal said it was “very unfortunate”, and the industry should stand with “whatever route the government of India wants to take” in the national interest. “We have to worry about 1.4 billion people here; we don’t have to worry about what’s happening in other parts of the world,” Jindal said.
The Left parties have strongly condemned Mr Trump’s imposition of 50% tariff on Indian exports, calling it a “bullying tactic.” They urged the Union government to firmly assert the nation’s strategic autonomy. The Communist Party of India-Marxist (CPI-M) Polit Bureau in a statement here said that Mr Trump’s announcement was “arbitrary, dictatorial and reflects the bullying tactics of the U.S. administration”.
“The U.S. and the EU are attempting to arm twist countries like India for continuing trade relations with Russia, even as they themselves continue to trade with Russia,” the party said, urging the Indian government to stand firm and resist succumbing to pressure from the U.S. “The government must take immediate steps to protect the interests of Indian exporters who will be adversely affected by these tariff hikes,” the statement said.
AIMIM president Asaduddin Owaisi on Thursday said US President Donald Trump’s decision to impose 50 per cent tariff on Indian goods would hurt Indian exporters, MSMEs, manufacturers and would disrupt supply chains, deter FDI, and hit jobs hard. In a post on X, the Hyderabad MP said “This isn’t diplomacy, it’s bullying by the buffoon-in-chief who clearly doesn’t understand how global trade works.” “These tariffs will hurt Indian exporters, MSMEs, and manufacturers. It’ll disrupt supply chains, deter FDI, and hit jobs hard. But why will Narendra Modi care? Where are those BJP muscle-flexers now?” the AIMIM chief asked.
The Congress leader Shashi Tharoor said India should in response also raise tariffs on American goods to 50%. Mr Tharoor questioned why India should stop at the current 17% tariff and emphasised that the country should not be intimidated by such actions. He also said no country should be allowed to threaten India in this manner.
Another Congress leaders Manish Tewari and Karti Chidambaram have hit out at the Narendra Modi government alleging “lack of transparency and diplomatic resolve” in dealing with US President Donald Trump’s tariff threats.
Their reactions follow Trump’s decision to increase tariffs on key Indian exports, despite India’s earlier attempts to strike a conciliatory tone on trade. Congress leaders have raised pointed questions about the efficacy of the government’s strategy, especially in light of Prime Minister Narendra Modi’s long-touted “personal rapport” with Trump.
Mr Tewari questioned the government’s silence and urged it to explain what Trump is trying to achieve through what he termed “coercion” and “intimidation.” “Ask the government what Trump is trying to do. Government needs to stand up and come very clear that why is this intimidation and coercion taking place. The fact is that what is happening is totally unprecedented,” said Tewari.
He further stressed the need for parliamentary accountability and transparency in trade negotiations. “On one hand, the government needs to stand up straight and demonstrate some spine against this coercion and bullying. But more importantly, the government must take Parliament into confidence as to what is happening with the trade negotiations. You need a more holistic statement on what is the status of the tariff negotiations,” he added.
Echoing similar concerns, Congress MP Karti Chidambaram called for an all-party meeting to deliberate on the evolving situation. “Government must take Parliament into confidence or call for an all-party leadership meeting and tell us what they propose to do,” he said.
He took direct aim at the “so-called special relationship” between Modi and Trump. “This is a serious issue. It clearly shows the special relationship that the government claimed to have with Donald Trump does not exist. That dosti or the personal bond between the two leaders does not exist — it is now clear.”
