After US Imposes 26% Reciprocal Tariffs, India's Stock Dropped

Following the imposition of reciprocal tariffs of 26% by the United States, India's stock plummeted on April 3. U.S. President Donald Trump imposed a 26% reciprocal duty on India on 2 March as part of his plan to impose a 10% baseline tariff on all trade partners from 5 April. Further, he also imposed greater tariffs on dozens of other countries, including 34% on China from April 9. China's major indices dropped 1.5%, while Thailand and Vietnam saw declines of 1% and 6.1%, respectively. While small-cap stocks increased by 0.2%, the Indian mid-cap index fell by 0.2%. Although analysts pointed out that the reciprocal tariffs are lower than those imposed on Asian exporters like China, Vietnam, and Thailand. This advantage may give India a competitive edge. Experts further stated that the immediate impact on Indian markets is negative due to worries about global trade and growth.

India's Pharmaceutical Sector Exempted From Trump's Reciprocal Tax

In his "reciprocal tariffs", Trump exempted imports of energy, pharmaceuticals, and some minerals. This move is expected to provide India's generic drug industry a reprieve. In an information sheet, the White House stated that the Reciprocal Tariff would not apply to certain products. These include (1) items covered by 50 USC 1702(b); (2) steel/aluminum products and automobiles/auto parts already subject to Section 232 tariffs; (3) copper, semiconductors, pharmaceuticals, and lumber products; (4) any and all items that could be subject to Section 232 tariffs in the future; (5) bullion; and (6) energy and other specific minerals that are not available in the United States.

US Tariffs don't have as Much of an Impact on India: ASSOCHAM President Sanjay Nayar

According to ASSOCHAM president Sanjay Nayar, the United States' tariffs are not having a significant negative impact on India. ASSOCHAM's Nayar emphasised that the Indian economy is more inward-looking than its peer Asian markets. Nayar stated that he believes India is not as severely affected by the tariffs; while the 26% tariff figure may seem high, it appears to be less so when compared to other Southeast Asian nations. Other significant nations with import duties include China (34%), the European Union (20%), Vietnam (46%), Taiwan (32%), Japan (24%), India (26%), the United Kingdom (10%), Bangladesh (37%), Pakistan (29%), Sri Lanka (44%), and Israel (17%). Steel, aluminium, and auto-related products will be subject to a 25% tax under the imposed duties, whereas pharmaceuticals, semiconductors, copper, and energy products would not be subject to any tariffs. The analysts claim that the tariffs placed on Indian goods going to the US pose a dilemma for the country's manufacturing industry.