MUMBAI (Reuters) -U.S. President Donald Trump issued an executive order on Wednesday imposing an additional 25% tariff on goods from India, saying the country directly or indirectly imported Russian oil.
The additional tariffs mean India will face the highest levy along with Brazil, putting it at a significant disadvantage against regional competitors such as Vietnam and Bangladesh.
A. PRASANNA, CHIEF ECONOMIST, ICICI SECURITIES PRIMARY DEALERSHIP, MUMBAI
The additional tariffs will come into effect after 21 days but it will be on top of earlier 25% so the total 50% rate will be a big negative for Indian exports. However some key segments like electronics and pharma continue to be exempt from this additional rate.
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At 50% rate, many Indian exports will face a handicap versus countries that are in the 15-30% bucket.
SAKSHI GUPTA, PRINCIPAL ECONOMIST, HDFC BANK, GURUGRAM
While Trump’s order gives another 21 days for a deal to breakthrough, in case it does not we will have to significantly lower FY26 GDP growth forecast to below 6%, baking in a 40-50 bps hit. This would be double our earlier estimates (of GDP hit from higher tariffs).
TERESA JOHN, LEAD ECONOMIST, NIRMAL BANK INSTITUTIONAL EQUITIES, MUMBAI
The pressure is mounting on India to come to a trade agreement. India may agree to significantly reduce Russian purchases over a phased manner and diversify to other sources.
GAURA SEN GUPTA, ECONOMIST, IDFC FIRST BANK, MUMBAI
Post this order bilateral tariffs will rise to 50%, which would be the highest applied from August onwards. This definitely increases the downside risk to 2025-26 GDP estimate.
For now if the tariffs persist till March 2026 total downside risk is estimated at 0.3% to 0.4%.
(Reporting by Nikunj Ohri in New Delhi, Swati Bhat in Mumbai and Aleef Jahan in Mumbai; Writing by Ira Dugal; Editing by Toby Chopra)