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The US alone accounts for around 18 percent of India's total exports to the world (about 2.2% of GDP by 2023–24) and is also India's largest exporter.
US President Donald Trump's tariff war may cause more damage to emerging countries like India, China, and Thailand than to Asian countries. Brokerage firm Nomura has said this in its report.
Nomura said that the effective tariff rates of India, Thailand, and China are much higher than the US. India's average tariff rate on US exports is 9.5 percent.
India has the highest export tariff rate
These sectors of India are most at risk
US President Donald Trump's tariff war may cause more damage to emerging countries like India, China, and Thailand than to Asian countries. Brokerage firm Nomura has said this in its report.
Nomura said that the effective tariff rates of India, Thailand, and China are much higher than the US. India's average tariff rate on US exports is 9.5 percent.
Whereas the tariff rate on India's exports to the US is 3 percent. In Thailand, this situation is 6.2 percent versus 0.9 percent, and in China, it is 7.1 percent versus 2.9 percent.
In their note, Nomura analysts said, "Countries with free trade agreements (FTAs) with the US, such as Singapore and South Korea, are more secure from Trump's retaliatory tariff threat.
In their note, Nomura analysts said, "Countries with free trade agreements (FTAs) with the US, such as Singapore and South Korea, are more secure from Trump's retaliatory tariff threat.
Analysts believe that India is one of the Asian economies with very high tariff rates. Therefore, India is more vulnerable to Trump's tariff rate hike.
The US alone accounts for about 18 percent of India's global exports (about 2.2 percent of GDP by FY 2023-24) and is also India's largest exporter. The India-US trade surplus has risen in recent years to a high of about $38 billion in 2024.
Analysts led by Nomura Chief Economist Sonal Varma said, "India's major exports to the US include electrical/industrial machinery, gems and jewelry, pharmaceuticals, fuel, iron and steel, textiles, vehicles, apparel, and chemicals.
Of these, iron, steel, and aluminum account for about 5.5 percent of the total."
Trump's tariff threat rattled markets
The direct impact of Trump's threat of tariff hike is being seen in the equity markets. Trump's warning, along with the weak quarterly results of domestic companies, has destabilized the domestic stock markets.
The Nifty 50 index has slipped more than 1% so far in the calendar year. The Nifty Midcap 100 and Nifty Smallcap 100 indexes have fallen by more than 8 percent and 11 percent, respectively, during this period.
Christopher Wood, Global Head of Equity Strategy at Jefferies, says that Donald Trump's latest attitude towards tariffs is mainly a strategy of bargaining.
