‘Welcome relief:’ Experts claim Trump’s toll relocation might increase India’s pharma, fabric markets–

In what came as a significant alleviation for India’s common medications sector, the mutual tolls introduced by United States President Donald Trump Wednesday (April 2) spared drugs, power and specific minerals.

The White House in a factsheet claimed “copper, pharmaceuticals, semiconductors, and lumber articles” will not undergo mutual tolls.

The United States head of state introduced a 27 percent mutual toll on India, asserting the South Asian nation enforces a 52 percent toll on American imports and participates in money adjustment and non-tariff obstacles.

According to specialists, the relocate to excluded drugs shows the relevance of economical medications in international health care.

“The exemption for pharmaceuticals is a welcome relief, reaffirming the importance of affordable medicines in global healthcare,” states Divya Bhushan, Tax Partner, EY India.

“This decision not only protects our industry but also underscores the critical role that Indian drug makers can continue to play in ensuring access to essential medications worldwide, being suppliers of quality and cost-effective medicines,” she adds.

White House fact sheet cites India’s high tariffs

The White House fact sheet cited India’s 70 per cent levy on passenger vehicle imports among others to justify its move to impose tariffs on India.

“India imposes their own uniquely burdensome and/or duplicative testing and certification requirements in sectors such as chemicals, telecom products, and medical devices that make it difficult or costly for American companies to sell their products in India. If these barriers were removed, it is estimated that US exports would increase by at least $5.3 billion annually,” the factsheet claimed.

< h2 id=" relief-in-textile-sector-as-well">Relief in textile sector as well

Experts highlighted how Trump’s tariff move may also put India’s textile sector in an advantageous position.

Paresh Parekh, Partner and Retail Tax Leader, EY India notes how most of India’s competitors have been slapped with higher tariffs, putting India’s textile industry in a better position.

“India competes globally for textile exports with countries like Bangladesh, Vietnam, Cambodia, Sri Lanka, China, Pakistan, etc. Interestingly, as compared to around 27% tariff for Indian imports, these countries have been hit harder by USA tariffs: Bangladesh 37%, Vietnam 46%, Cambodia 49%, Pakistan 29%, China 54%, Sri Lanka 44%, etc. US buys over USD 36bn textiles from India, which is around 30% share for sector India exports. This situation poses an opportunity for the Indian textile sector to grab and increase its market share in the US,” Parekh says.

But he also highlights the risks associated with the move.

“However, there is a risk as well – if there is slowdown in consumption in US due to higher prices, the overall US market itself may shrink. The Indian textile sector also hopes to secure further strategic advantage by inclusion of textile in potential “zero for zero” India-USA trade deal if it happens,” Parekh includes.