US Tariffs To Have Minimal Effect On India's GDP, Exports: Study

The 25 per cent tariffs on Indian goods announced by US President Donald Trump will have "negligible" impact on the country's GDP as only USD 8.1 billion of exports to America might get affected, according to a PHDCCI study released on Wednesday.

The tariffs announced by the US are likely to come into effect on August 7, 2025.

The paper, released by the PHD Chamber of Commerce and Industry (PHDCCI), also recommends a series of measures to mitigate the impact of US tariffs.

"Our analysis indicates that there will be an estimated impact of only 1.87 per cent on India's total global merchandise exports and a negligible 0.19 per cent on India's GDP as a result of a 25 per cent tariff announced by the US on India," said Hemant Jain, President, PHDCCI.

The study said the total potential export impact is estimated at USD 8.1 billion based on 2024-25 merchandise exports of USD 86.5 billion (1.87 per cent of India's total global export).

Among other sectors, the study said the levies would impact engineering goods (USD 1.8 billion), gems and jewellery (USD 932 million), and ready-made garments (USD 500 million).

In the wake of the US tariffs, the industry body has recommended several measures, including increasing market penetration, product development and market diversification.

It suggested that stakeholders should negotiate bundled-pricing deals (textiles plus accessories) to absorb some tariff cost and maintain shelf-price competitiveness.

"Leverage Indian exodus networks (trade fairs, cultural events) to boost volume with existing buyers under current product portfolios," it said.

PHDCCI also made a strong case for investments in joint ventures with US firms to produce tariff-sensitive goods on-shore, thereby converting exports into high-value services and intellectual property (IP) licensing.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)