What Impact Will US Tariffs Have on India?

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00:00We know that these tariffs have taken effect, the additional 25% that Donald Trump was threatening.

00:06So the big question is, what impact is this actually going to have on the Indian economy?

00:12Well, I've been watching a lot of interviews with Indian business on various sort of news shows throughout the day,

00:17and a lot of them were all saying that this is going to have a big impact,

00:21especially on sort of low-cost and low-margin industries,

00:25because it's basically going to impact things like sort of clothes, diamonds, and these kind of industries.

00:31And the U.S. sort of India sort of goods and service trade is worth about $210 billion,

00:37so it's quite a substantial amount, and it has been going up sort of 8% last year.

00:43But the issue is, and this is the bugbear that Trump has with a lot of the countries,

00:47is that there's more goods going from India into the U.S. than the opposite way around.

00:51So there's a big deficit, which is his sort of massive bugbear.

00:54And we're talking about like $45 billion, so it's quite a substantial difference.

00:59But when you look at it in the grand scheme of things, the U.S. accounts for only about like 2% of India's GDP.

01:05So if you look at any country around the world, if they knock off 2%, you'd be like, oh, they'll be fine.

01:09So India is going to survive, but what I think is quite unfortunate that, like I said,

01:15it's going to impact probably the poorest end of the employee sort of demographic in India,

01:20and those that are sort of in high-end industries like pharmaceuticals and electronics

01:24have been sort of fairly sort of exempt from this from the moment.

01:28And I looked up at the Indian Express, which is one of the local newspapers.

01:33They were predicting that U.S. trade could actually drop by up to like 40%, 45% in the next sort of year.

01:39So, yeah, it's going to have a huge impact.

01:41And unfortunately, all of the companies that I've seen being interviewed were saying that they're already seeing the impact

01:47because they knew this was coming, and they were saying that the American buying public is not going to absorb this.

01:54So they'll either be forced out of the market or they'll have to look at other markets like the U.K., Europe, sort of the Middle East.

02:02But, yeah, it is definitely going to have an impact.