Commerce ministry 'working on different scenarios' to assess Trump tariff fallout: Report

The commerce ministry is preparing for multiple scenarios in response to the impending reciprocal tariffs set to be imposed by US President Donald Trump on April 2, news agency PTI reported quoting sources. The ministry is assessing the potential impact of these duties on Indian exports and exploring strategies to mitigate their effects, sources told PTI.
Trump has declared April 2 as 'Liberation Day,' promising to introduce tariffs aimed at reducing America's trade deficit and boosting domestic manufacturing. While India and the US are working on a bilateral trade agreement to facilitate investment and commerce, the looming tariffs have raised concerns among Indian exporters, who fear they could make their products less competitive in global markets.
Officials within the commerce ministry are analysing various possibilities, as it remains unclear whether the tariffs will be applied at a product, sector, or country level. The US Trade Representative’s National Trade Estimate Report 2025 states that India maintains high import duties on several American goods, including agricultural products, pharmaceuticals, and alcoholic beverages. The US claims that such barriers create trade imbalances, with Indian farm exports facing a 5.3% duty in the US, while American farm exports to India are subjected to a significantly higher 37.7% duty.
Trade experts point out that the potential tariff gaps vary across industries. The chemical and pharmaceutical sector faces an 8.6% tariff gap, plastics 5.6%, textiles 1.4%, jewellery 13.3%, base metals 2.5%, machinery 5.3%, electronics 7.2%, and automobiles a substantial 23.1%. Sectors heavily reliant on exports to the US, such as seafood, dairy, wines, diamonds, electronics, and chemicals, could experience the most severe impact.

In addition to tariffs, Indian exporters have flagged concerns over non-tariff barriers imposed by the US, such as stringent private standards and costly registration processes for pharmaceuticals.
Trump has reiterated his stance on imposing tariffs, saying that other nations have taken advantage of the US for years. “I think I heard that India is going to be dropping its tariffs very substantially. A lot of countries are going to be dropping their tariffs,” he said, adding that some nations had already reduced their duties on American goods.
The White House echoed these concerns, highlighting that India imposes a 100% tariff on American agricultural products. White House Press Secretary Karoline Leavitt emphasised that high tariffs by other nations have made it “virtually impossible” for US products to enter their markets, leading to job losses in America.
Trump’s planned tariffs include measures targeting pharmaceuticals, copper, lumber, and automobiles, among others. While some analysts warn that these duties could lead to higher consumer prices in the US, Trump argues they will encourage domestic production and investment. His administration has suggested that the tariffs could be used as leverage in trade negotiations, with some officials indicating that adjustments might be made after the initial implementation.