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Time of India
2 days ago
- Business
- Time of India
India-US trade: Donald Trump slaps 25% tariffs, penalty on Indian exports to US
US President on Wednesday announced sweeping new trade restrictions on India, imposing a 25 per cent tariff on all Indian imports starting August 1. Along with the tariff, an additional penalty has been declared, targeting India's recent defence and energy purchases from Russia. Tired of too many ads? go ad free now The announcement, made via Truth Social, said India maintained 'the most strenuous and obnoxious' trade barriers and purchased 'significant' military and energy supplies from Russia despite the Ukraine conflict. The move comes just weeks before a US trade delegation is scheduled to visit India for the sixth round of talks aimed at finalising a bilateral trade deal. Trump's declaration is now being widely viewed as a pressure tactic. India hasissued a statement saying it is 'studying the implications' of Trump's move and remains 'committed to concluding a fair, balanced and mutually beneficial bilateral trade agreement.' Officials also emphasised that India would take 'all steps necessary to secure our national interest,' especially for sectors like agriculture, MSMEs, and exports. Here are the views of the experts on the issue: Madhavi Arora, economist at Emkay Global, highlighted the broader geopolitical angle, stating, 'While the negotiations seem to have broken down, we don't think the trade deal haggling between the two nations is over yet. We see it more from the lens of geopolitics than purely economics and see both sides striving to get the deal done, even as the power equations may change a bit in US favour.' Meanwhile, Agneshwar Sen, trade policy leader at EY India, noted the continuation of talks despite the tariff announcement. 'The decision to raise the US tariff to 25 per cent on Indian exports is an unfortunate development, particularly given the strong strategic partnership that has been steadily built between India and the USA in recent years. Tired of too many ads? go ad free now However, it's important to note that both countries remain positively engaged in active negotiations with the US team expected in India later in August to finalise a comprehensive trade agreement. ' Garima Kapoor of Elara Securities also maintained a cautiously optimistic stance, saying, 'Overall, we continue to see a deal by the end of Q3 but a kneejerk reaction in Indian asset classes is likely in the near term.' Ranen Banerjee of PwC India focused on India's relative tariff burden, observing, 'Higher tariffs for India compared to countries it competes with, for exports to the US, are going to be challenging. However, the expectation is that the trade deal is likely to be finalised shortly and hence the period of applicability of these higher tariffs could be short.' Sakshi Gupta, principal economist at HDFC Bank, pointed to potential currency market volatility. 'For now, the announcement of 25 per cent tariffs is likely to cause volatility in the FX market with mounting depreciation pressure on the rupee. Although the RBI is likely to intervene tomorrow to tamp down the depreciation pressure.' Aditi Nayar, chief economist at ICRA, warned of GDP implications. 'When the US had initially imposed tariffs, we had lowered our forecast of India's GDP expansion to 6.2 per cent for FY2026, presuming a tepid rise in exports and a delay in private capex. The tariff (and penalty) now proposed by the US is higher than what we had anticipated, and is therefore likely to pose a headwind to India's GDP growth. The extent of the downside will depend on the size of the penalties imposed. ' From a trade industry perspective, Kirit Bhansali of the Gem and Jewellery Export Promotion Council said, 'This is a deeply concerning development. The Indian gem and jewellery sector, in particular, stands to be severely impacted. The United States is our single largest market, accounting for over $10 billion in exports - nearly 30 per cent of our industry's total global trade. A blanket tariff of this magnitude will place immense pressure on every part of the value chain. We recognise the need to address trade imbalances, but such extreme measures undermine decades of economic cooperation. We urge the US administration to reconsider, and call on both governments to engage in constructive dialogue that safeguards bilateral trade and protects the millions of jobs that depend on it on both sides.' N Thirukkumaran of the Tiruppur Exporters' Association saw this as part of a bargaining game. 'It is just a negotiation tactic. Trade negotiations are ongoing. The Indian government is tough on certain terms like agriculture and dairy — India isn't opening up. If it goes through, US exports from the association will be affected, because Vietnam has lower tariffs. We will be losing our competitive edge. We are optimistic that an imminent trade agreement will be on the lines of the one with the UK. We have to wait and watch, and not panic. There is no reason to panic.' Nilesh Shah, MD of Kotak Mahindra AMC, emphasised policy response and market hopes. 'Despite the unpredictable policy making of the US, the market was expecting a tariff deal to work out as longer-term US-India strategic interests are aligned. Markets will hope for a 'TACO' trade if better senses prevail. China is defying US/UN sanctions on Iran oil, Myanmar and Russia trade and North Korea support. Size and the competitiveness of the economy have their advantages. I hope and pray that this unilateral imposition should accelerate Indian policy-making to be growth-supportive. Our biggest deterrence continues to remain GDP size and competitiveness.' Rahul Mehta of the Clothing Manufacturers Association of India shared concerns about competitiveness. 'Having seen the several about turns on the tariff front in the case of other countries, I would not press panic buttons right now. But, if the proposed terms do come into effect, it will make our products 7 per cent to 10 per cent more expensive than some of our competitors, and it will certainly hurt our apparel exports to the US Fortunately, this set-back has come at the time when we have just signed an FTA with UK, and are proceeding rapidly with an FTA with EU. ' SC Ralhan of the Federation of Indian Export Organisations added, 'This is a major setback for Indian exporters, especially in sectors like textiles, footwear, and furniture, as the 25 per cent tariff will render them uncompetitive in the US market against rivals from Vietnam, China, and elsewhere. However, we remain hopeful that both countries will work towards a bilateral trade agreement.' Colin Shah of Kama Jewellery also underlined the blow to export-heavy sectors. 'With US being one of the key export destinations, this will severely impact the sectors like gems and jewellery that are heavily dependent on exports. Going ahead, we expect trade activities to remain muted with US However, we also need to wait and watch how the situation unfolds.' Ashok Chandak of the India Electronics & Semiconductor Association pointed to a broader shift needed in India's strategy. 'The imposition of a 25 per cent tariff by the US on Indian goods will be short-term. Indian electronics exports is a short-term challenge that could disrupt supply chains and dent price competitiveness. India does not have any major advantage compared to other Asian countries anymore if a 25 per cent tariff above the baseline 10 per cent is continued. However, it also underlines the urgency for India's electronics sector to diversify export markets, deepen domestic markets, develop Indian brands and products, and move up the value chain to reduce dependency on price-sensitive, tariff-exposed exports.' Avinash Gorakshakar of Profitmart Securities cautioned against speculation, noting, 'Until the final document is released, it's all speculation. India is a large, attractive market that the US cannot afford to ignore, so any move will ultimately be weighed against long-term interests. My sense is that the August 1 deadline may itself be flexible, and India is unlikely to budge easily. In the short term, the announcement could trigger some selling pressure, but in the longer term, I expect the impact to neutralise. India's market attractiveness remains intact.' Harsha Vardhan Agarwal of FICCI struck a hopeful tone, saying, 'We hope that this imposition of higher tariffs will be a short-term phenomenon and that a permanent trade deal between the two sides will be finalised soon. The aim is to secure a beneficial pact rather than a hurried deal that gives short-term benefit but may result in adverse outcomes in the long term. It is also important to note that India offers a large market for US businesses and many of the large companies from the US benefit from leveraging the demand as well as the skills and talent pool that we have to offer. ' (With inputs from Reuters)
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Business Standard
2 days ago
- Business
- Business Standard
Trump's 25% tariffs: 'Unfortunate', say experts, hope trade deal works out
The move comes even as the two countries continue negotiations on a trade agreement that has been in the works for several months New Delhi United States (US) President Donald Trump on Wednesday announced a 25 per cent tariff on goods imported from India, effective August 1. He also warned of unspecified penalties for India's purchases of Russian military equipment and oil. The announcement came even as both countries continued negotiations on a trade agreement that has been under discussion for several months. Reacting to the decision, Madhavi Arora, chief economist at Emkay Global, told Reuters that although the negotiations appeared to have stalled, discussions over a bilateral trade deal were likely not finished. "We see it more from the lens of geopolitics than purely economics and see both sides striving to get the deal done, even as the power equations may change a bit in the US' favour," Arora said. Soon after the announcement, White House economic adviser Kevin Hassett said Trump was frustrated with the lack of progress and believed the tariff would aid negotiations. "I think President Trump is frustrated with the progress we've made with India but feels that a 25 per cent tariff will address and remedy the situation in a way that's good for the American people," Hassett said, according to Reuters. Unfortunate tariff move, but trade deal hopes remain alive Industry experts noted that while the tariff posed significant challenges for Indian exporters, there remained cautious optimism that a trade agreement could be finalised soon. Ranen Banerjee, partner at Economic Advisory, PwC India, said higher tariffs on Indian goods, compared to competing countries, would be difficult to absorb. 'However, the expectation is that the trade deal is likely to be finalised shortly and hence the period of applicability of these higher tariffs could be short,' he added. Highlighting the growing strategic partnership between India and the US, Agneshwar Sen, trade policy leader at EY India, described the move as 'an unfortunate development.' However, he also said that both countries remained positively engaged in negotiations, with the US team expected in India later in August to finalise a comprehensive trade agreement. Nilesh Shah, managing director at Kotak Mahindra AMC, said markets had anticipated a resolution on tariffs, given the alignment of long-term strategic interests between India and the US. 'Markets will hope for a 'TACO (Trump Always Chickens Out)' trade if better senses prevail,' Shah told Reuters. He also pointed to continued trade activity between other countries and sanctioned nations. 'China is defying US/UN sanctions on Iran oil, Myanmar and Russia trade, and North Korea support,' he said. Shah stressed that India's size and competitiveness remain its best defence. 'Our biggest deterrence continues to be GDP size and competitiveness.' He expressed hope that the tariff imposition would prompt Indian policymakers to adopt a more growth-oriented approach.
Economic Times
2 days ago
- Business
- Economic Times
25% tariff + penalty: How economists, experts reacted to Trump tariff on India
United States President Donald Trump announced on Wednesday that a 25% tariff will be imposed on goods imported from India starting August 1, with an unspecified penalty for buying Russian weapons and surprise announcement came a day after Indian officials said that a US trade team would visit from August 25 to negotiate a trade deal. The announcement is being seen a pressure tactics to get New Delhi to agree to demands made by the US, which has in recent days got favourable trade deals with major partners like Japan, the UK and the European on the 25% tariff, Harsha Vardhan Agarwal, President, FICCI said, 'While this move is unfortunate and will have a clear bearing on our exports, we hope that this imposition of higher tariffs will be a short-term phenomenon and that a permanent trade deal between the two sides will be finalised soon.''India and U.S. have a long-standing partnership, which is strengthened by our deepening engagement across an array of areas from technology to defence to energy and advance manufacturing. There is a lot our two countries can achieve together, and FICCI is confident that following the detailed deliberations that are currently underway, we will see beneficial outcomes for both countries when the contours of the final trade agreement will emerge,' he added. "While the negotiations seem to have broken down, we don't think the trade-deal haggling between the two nations is over yet. We see it more from the lens of geopolitics than purely economics and see both sides striving to get the deal done, even as the power equations may change a bit in U.S. favour," said Madhavi Arora, Economist at Emkay Global. "Higher tariffs for India compared to countries it competes with, for exports to the U.S., are going to be challenging. However, the expectation is that the trade deal is likely to be finalised shortly and hence the period of applicability of these higher tariffs could be short," said R Anen Banerjee, partner of economic advisory at PWC India. "Despite the unpredictable policy making of the U.S., the market was expecting a tariff deal to work out as longer-term U.S.-India strategic interests are aligned. Markets will hope for a 'TACO' trade if better senses prevail. China is defying U.S./UN sanction on Iran oil, Myanmar and Russia trade and North Korea support. Size and the competitiveness of the economy has its advantages. I hope and pray that this unilateral imposition should accelerate Indian policy making to be growth supportive. Our biggest deterrence continues to remain GDP size and competitiveness," said Nilesh Shah, MD, Kotak Mahindra AMC. "The decision to raise the U.S. tariff to 25% on Indian exports is an unfortunate development, particularly given the strong strategic partnership that has been steadily built between India and the USA in recent years. However, it's important to note that both countries remain positively engaged in active negotiations with the U.S. team expected in India later in August to finalize a comprehensive trade agreement," said Agneshwar Sen, Trade Policy Leader, EY India.
Time of India
2 days ago
- Business
- Time of India
25% tariff + penalty: How economists, experts reacted to Trump tariff on India
United States President Donald Trump announced on Wednesday that a 25% tariff will be imposed on goods imported from India starting August 1, with an unspecified penalty for buying Russian weapons and oil. The surprise announcement came a day after Indian officials said that a US trade team would visit from August 25 to negotiate a trade deal. The announcement is being seen a pressure tactics to get New Delhi to agree to demands made by the US, which has in recent days got favourable trade deals with major partners like Japan, the UK and the European Union. Explore courses from Top Institutes in Please select course: Select a Course Category Commenting on the 25% tariff, Harsha Vardhan Agarwal, President, FICCI said, 'While this move is unfortunate and will have a clear bearing on our exports, we hope that this imposition of higher tariffs will be a short-term phenomenon and that a permanent trade deal between the two sides will be finalised soon.' 'India and U.S. have a long-standing partnership, which is strengthened by our deepening engagement across an array of areas from technology to defence to energy and advance manufacturing. There is a lot our two countries can achieve together, and FICCI is confident that following the detailed deliberations that are currently underway, we will see beneficial outcomes for both countries when the contours of the final trade agreement will emerge,' he added. "While the negotiations seem to have broken down, we don't think the trade-deal haggling between the two nations is over yet. We see it more from the lens of geopolitics than purely economics and see both sides striving to get the deal done, even as the power equations may change a bit in U.S. favour," said Madhavi Arora, Economist at Emkay Global . Live Events "Higher tariffs for India compared to countries it competes with, for exports to the U.S., are going to be challenging. However, the expectation is that the trade deal is likely to be finalised shortly and hence the period of applicability of these higher tariffs could be short," said R Anen Banerjee, partner of economic advisory at PWC India. "Despite the unpredictable policy making of the U.S., the market was expecting a tariff deal to work out as longer-term U.S.-India strategic interests are aligned. Markets will hope for a 'TACO' trade if better senses prevail. China is defying U.S./UN sanction on Iran oil, Myanmar and Russia trade and North Korea support. Size and the competitiveness of the economy has its advantages. I hope and pray that this unilateral imposition should accelerate Indian policy making to be growth supportive. Our biggest deterrence continues to remain GDP size and competitiveness," said Nilesh Shah, MD, Kotak Mahindra AMC. "The decision to raise the U.S. tariff to 25% on Indian exports is an unfortunate development, particularly given the strong strategic partnership that has been steadily built between India and the USA in recent years. However, it's important to note that both countries remain positively engaged in active negotiations with the U.S. team expected in India later in August to finalize a comprehensive trade agreement," said Agneshwar Sen, Trade Policy Leader, EY India.
New Indian Express
2 days ago
- Business
- New Indian Express
Adani Green Energy Q1 profit jumps 51% on capacity addition, power sales
CHENNAI: Adani Green Energy Ltd (AGEL) reported a sharp rise in profits and revenue for the first quarter of FY26, driven by strong growth in renewable power capacity and improved operational performance. The company's consolidated EBITDA rose 29% year-on-year (YoY) to Rs 30,400 crore, supported by a 45% increase in its total operating capacity, which now stands at 15.8 GW. Power generation improved significantly, leading to a 42% jump in power sales during the quarter. AGEL's adjusted net profit (APAT) grew 51% YoY to ₹730 crore. Revenue also rose by 36% YoY and 24% quarter-on-quarter (QoQ) to ₹3,800 crore, with core power supply revenue contributing ₹3,310 crore. The company achieved better capacity utilisation factors (CUFs), especially in wind energy, which reached 42.3%. Hybrid and solar CUFs also showed improvement, backed by increased output from resource-rich sites. However, AGEL faced a 7% drop in average realisation per unit of power, mainly due to lower merchant power tariffs. Merchant and infirm power sales now account for 41% of the total, up from 33% in the previous quarter. Total capital expenditure stood at Rs 6,500 crore for the quarter, while gross debt remained steady at Rs 78,000 crore. During Q1, the company added 1.6 GW of renewable energy capacity, with major progress at its Khavda project site, which now has 5.6 GW in place. AGEL reaffirmed its target to add 5 GW of new capacity in FY26, despite minor delays at Khavda due to evacuation issues. These are expected to ease in the next quarter. Outlook AGEL continues to explore new opportunities in battery energy storage systems (BESS) and pumped storage projects (PSP), with a 5 GW PSP pipeline under development. The company also expects borrowing costs to decline slightly during the year from the current 9.1–9.2% range. Stock analysts at leading brokerage Emkay Global say that despite some operational challenges and volatility in merchant tariffs, they remain bullish on AGEL's long-term prospects. The stock has a 'Buy' rating with a target price of Rs 1,500, based on strong growth potential and steady earnings. However, they caution that risks remain, including project delays, regulatory changes, and technology-related uncertainties.
