Bharat Forge chairman & MD Baba Kalyani minced no words on Thursday when he said that a 50% import tariff by the US was something that no industry in India could absorb. “It is simply undoable. You might as well not have a business at all,” he said unequivocally, adding that a long-term political solution to the trade issue with the US was important.
Thursday saw the first import duty levy of 25%, announced last week by the US, kick in, implying that Indian goods were costlier than peers in the US. The additional levy of 25% announced on Wednesday will kick in after 21 days. Both gems and jewellery, and apparel exporters, who count the US among their largest markets, have said that American buyers have begun cancelling orders, leading to potential job loss and disruption of business.
America accounted for 33% of India’s total garment exports in 2024. The US market is India’s largest for polished diamonds and studded jewellery worth $10 billion as of FY25.
“We will reroute our products through other countries after studying the tariff structure of those countries with the US. We will set up manufacturing units there quickly,” Gems & Jewellery Export Promotion Council (GJEPC) chairman Kirit Bhansali said.
“Dubai is the nearest destination for us. We will also look at rerouting studded jewellery through Mexico,” Bhansali added. The United Arab Emirates faces only a 10% tariff, while Mexico is subject to a 25% duty, lower than India’s new rate of 50%.
India’s largest organised retailer Titan is also said to be considering relocating some of its manufacturing to West Asia to maintain access to the US market at lower tariffs.
Meanwhile, Trump’s tariffs have no direct impact on the country’s carmakers since they do not export to the US. But the auto components industry will get impacted, Maruti Suzuki chairman RC Bhargava said, as their exports to the US is significant. India exports $7 billion worth of auto components to the US. While the US was already levying a 25% duty on cars, small trucks and their parts from all countries since May 3, the tariff on components for commercial vehicles, earth-moving equipment and tractors was 10%. This will now rise to 50%, hurting half of auto component exports to that market, experts said.
Industry’s Response: Rerouting and Relocating Production
“The tariffs are unreasonable, unjustified and uncalled for. The government is going to do what is good for the country,” Bhargava said, when contacted.
Terming the imposition of additional tariffs on India unfortunate, JSW Cement MD Parth Jindal said that sentiment in the country could be hit with the move. “There will be no direct impact on either steel, cement or power industry because of the tariff hike, but sentiments could suffer,” Jindal said. The $23-billion JSW Group has a presence in steel, cement, power, paints and automobiles, among other sectors.
Nadir Godrej, chairperson, Godrej Industries, said that it was time to be self-reliant in an uncertain world. “While it is…
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