00:00Hello everyone, this is Gaurang and welcome back to Lokmat Times.
00:04A big news is making waves in India right now.
00:07US President Donald Trump has slapped a 50% tariff on Indian goods.
00:13Now that's a big deal and people are over India are talking about it.
00:17So in the story, we will discuss about it.
00:19But what exactly is a tariff?
00:22Why does it matter so much to India?
00:24What will happen because of this decision?
00:26And why would Trump, who seems so friendly with India's Prime Minister Narendra Modi, do this?
00:33Let's break it down in simple words so you can understand everything clearly.
00:37First things first, let us talk about what a tariff is.
00:42A tariff is like a tax that a country puts on goods coming from another country.
00:46Imagine you were buying a toy made in India and you were in the US.
00:50Because of this tariff, the toy will cost more because the US governments add an extra 50% charge on top of its price.
00:58This price makes Indian goods more expensive in the US, which can make people buy less of them.
01:03Trump's new tariff means that starting August 27, 2025, Indian products like clothes, jewellery and auto parts will face a 50% tax when they enter the US.
01:13This is on top of an earlier 25% tariff that started on August 7th.
01:17So the total tax now is a whopping 50%, one of the highest rates that the US has put on any country.
01:23Moving on, let's understand why is everyone in India talking about this.
01:27Because the US is a huge market for Indian goods, India sends about $87 billion worth of product to the US every year, which is a big chunk of its export.
01:38That's like 2-3% of India's entire economy.
01:41When the US puts such a high tariff, it makes Indian goods super expensive there.
01:46This could mean fewer sales, less money for Indian businesses and even job losses in some industries.
01:52Sectors like textiles, gems and jewellery, auto parts, seafood are especially at risk because they rely heavily on US buyers.
02:01For example, the US buys over 30% of India's jewellery and exports a lot of its textiles.
02:07If these products become too costly, American buyers might switch to cheaper options from countries like Vietnam, Indonesia, which face lower tariffs.
02:16The tariff also comes at a tricky time.
02:19India and the US have been trying to sign a trade deal to boost business between both the countries.
02:24But these high tariffs could mess up those stocks and hurt the strong partnership India has been building with the US.
02:31So now let's discuss what will happen to India because of this 50% tariff.
02:35Indian products will cost way more in the US and so Americans might buy less.
02:41This could cut India's exports by 40-50% in some of the sectors like textiles and jewellery.
02:48That's billions of dollars in losses.
02:50Industries like textiles, leather and auto parts employ millions of people in India.
02:55If exports drop, companies might make less money and workers could lose jobs.
03:00Small businesses, which are a big part of India's economy, could be hit hard.
03:05Experts say India's economy could take a small hit, maybe losing 0.2-0.4% of its growth.
03:13That might not sound like much, but for a country as big as India, it's a lot of money.
03:19It could also make investors nervous, causing India's stock market to dip and the rupee to weaken.
03:25Good news is that some Indian exports like medicines, electronics and IT services are exempt from these tariffs.
03:33So companies like those making iPhones or generic drugs for the US won't feel the pinch as much.
03:39Overall, while the tariff won't destroy India's economy, it is a big challenge for certain industries and could make life harder for many workers and businesses.
03:48Now many of you might think, why did Trump decide to put such a heavy 50% tariff on India?
03:53There are a few reasons and number one on the list could be India's trade with Russia.
03:58Trump upset because India buys a lot of oil and military equipments from Russia.
04:03He says this helps Russia's economy, which he blames for the Ukraine war.
04:08Trump declared a national emergency because of Russia's action and decided to punish countries like India that buy Russian oil.
04:15He wants India to stop or reduce these purchases.
04:19And the tariff is a way to pressure India.
04:21Trump is trying to show that he's tough on countries that don't follow US policies.
04:26Like buying Russian oil by targeting India, he's sending a message to other countries like China that they could face similar tariffs if they don't comply.
04:35India's government has called these tariffs unfair, unjustified and unreasonable.
04:40They point out that other countries like the US and European nations also trade with Russia, but aren't being punished as harshly.
04:48India says it buys Russian oil to keep energy prices low for its 1.4 billion people, which is a matter of national interest.
04:56So there you have it, a clear picture of Trump's 50% tariff on India.
05:00To sum it up, a tariff is a tax on goods, and this one makes Indian products super expensive in the US market.
05:07It is a big deal for India because it could hurt exports, jobs, and economic growth, especially in sectors like textiles and jewelry.
05:15For now, India is staying calm and avoiding retaliation.
05:19But for the next months, it will be very crucial.
05:22So the question is, will India and the US find a way to work this out or will tensions rise?
05:28Only the time will tell.
05:29Let us know in the comments what you think about this entire story and stay tuned for more updates.
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