Unsurprisingly, these industries form the backbone of Indian manufacturing and constitute some of the largest formal sector employers, especially labour-intensive industries like gems, textiles and chemicals.
Also, while India’s trade surplus with the US moderated during Trump’s first presidency, it picked up sharply and reached a high in 2024, rising to $38 billion from $31.2 billion in 2023.
It is worth noting that, in the run-up to the Modi-Trump meeting, New Delhi had already taken steps to reduce tariffs and it is considering more steps.
“We are yet to gauge how other countries will react to these tariffs and whether Indian exports will remain comparatively competitive once the dust settles. Tariffs can also be simply a negotiating ploy and any potential trade deals with the US might side-step the issue altogether,” they said.
They also expect a shift in the composition of energy imports into the country which is currently dominated by Russia.
With the US looking to become India’s top energy supplier, India could likely purchase less from Russia over time.