The United States has imposed a 26% tariff on Indian exports, effective April 9, 2025, as part of its “reciprocal tariffs” policy aimed at countries with significant trade surpluses. This move has sparked fears of a global economic slowdown and prompted Morgan Stanley to lower India’s GDP growth forecast to 6.1%. The investment bank has also revised its Sensex year-end target to 82,000. In the following points we are showing the deadly impact over the world economy as a result of this decision.
*Impact on Indian Exports*
The tariffs will affect major Indian export categories, including:
– *Auto parts*: Indian auto component manufacturers may face significant challenges due to the tariffs.
– *Gems and jewelry*: The industry is expected to take a hit, potentially impacting India’s export growth.
– *Pharmaceuticals exempted*: However, the US has spared key Indian goods like semiconductors, copper, and pharmaceuticals from the tariffs.
*Government Response*
The Indian government is closely monitoring the situation and preparing a mitigation strategy. A high-level meeting of the Union Cabinet is scheduled to assess the fallout and discuss ways to protect India’s trade interests. India is also working towards finalizing the US-India Bilateral Trade Agreement.
*Global Reaction*
*Economic Implications
The tariffs have sparked fears of a global economic slowdown, with stock markets around the world reacting negatively. The US indices posted losses, and Asian markets opened lower, with South Korea’s Kospi entering bear market territory.
The India’s GDP is projected to grow up for the first quarter 2025
India’s GDP is projected to grow by 6.5% in FY 2024-25, according to NSO’s Second Advance Estimates. Quarter 3 GDP growth was 6.2%, rebounding from 5.6% in Q2 due to higher private consumption and government spending. Sectors driving growth: construction, trade, and financial services.
