India's economic strength will withstand US tariff shock, sectoral experts speak in one voice

Times of Oman

3 days ago

New Delhi: Experts from across Indian industries have expressed confidence in the resilience of the Indian economy amid the US President Donald Trump's decision to impose a 25 per cent tariff on Indian goods, describing the move as impactful in the short term but unlikely to dent India's long-term economic growth story.
Reacting to the tariff hike announced by President Trump, Sushil Mohta, Chairman of the Kolkata-based real estate player Merlin Group, said India's robust economy would absorb the shock with minimal long-term disruption.
"I don't think it will make a huge difference. Our economy is very strong today, India is the fourth-largest economy in the world," Mohta told ANI. "The common people in India work very hard. Our growth is driven by that effort, not dependent on the policies of any one country."
He pointed to the relatively muted response in domestic stock markets as proof of the economy's strength.
"If there were a major global disruption, we would have seen an immediate reflection in the markets. That hasn't happened," he noted.
On the issue of trade exposure, Mohta said that India's economy is not overly reliant on the US or any single country.
From the agriculture sector, Dev Garg, Vice President of the Indian Rice Exporters Federation (IREF), noted that the US tariff move was "concerning" for rice exporters.
"Last year, India exported around Rs 3,100 crore worth of Basmati and non-Basmati rice to the US. This year, we've only managed Rs 833 crore so far," he said.
However, Garg also viewed the latest tariff development with cautious optimism.
"This could be a blessing in disguise. Thailand and Pakistan, our two key competitors in the US rice market, face 19 per cent tariffs, while India now faces 25 per cent -- just a 6 per cent gap," he explained. Expecting the depreciation of the Indian Rupee and anticipated deflationary trends in domestic prices, Indian rice could still remain competitive.
"We have record surplus stocks and a weaker rupee at Rs 88 per dollar. These factors may help us offset the tariff burden and possibly even surpass last year's export figures," he added.
Meanwhile, Niranjan Hiranandani, Chairman of the National Real Estate Development Council (NAREDCO), dismissed President Trump's remarks on India's economy being "dead," a comment echoed by Congress leader Rahul Gandhi.
"India is currently the fastest-growing major economy with a GDP growth rate of 6.2 per cent to 6.7 per cent. There's no question of it (Indian economy) being weak," Hiranandani said. "We are strengthening self-reliance across defence, agriculture, and manufacturing. The ambition is clear (that) India must become truly self-sufficient," he added.
Over the past few months, India and the US have been negotiating for an interim trade deal, but there were some reservations from the Indian side on the US demand for opening up the agricultural and dairy sectors for the US. Agriculture and dairy are critical for India as these two sectors provide livelihood opportunities to a large section of its people.
On Wednesday, President Trump announced the imposition of 25 per cent tariffs on Indian goods plus an unspecified 'penalty', even as there were hopes of an interim India-US trade deal that would have otherwise helped avoid elevated tariffs.
India and the US initiated talks for a just, balanced, and mutually beneficial Bilateral Trade Agreement (BTA) in March this year, aiming to complete the first stage of the Agreement by October-November 2025.
On April 2, 2025, President Trump signed an executive order for reciprocal tariffs on various trade partners, imposing varied tariffs in the range of 10-50 per cent.
He subsequently kept the tariffs in abeyance for 90 days, while imposing a 10 per cent baseline tariff.
The deadline was to end on July 9, and the US administration later pushed it ahead to August 1.
US President Donald Trump had imposed reciprocal tariffs on dozens of countries with which the US has a trade deficit. Since assuming office for his second term, President Trump has reiterated his stance on tariff reciprocity, emphasising that the United States will match tariffs imposed by other countries, including India, to "ensure fair trade".
On Thursday evening, Commerce and Industry Minister Piyush Goyal made a statement in both houses of the Parliament, stating that the government is examining the impact of tariffs and will take all necessary steps to safeguard the national interest.