Former Commerce and Home Secretary G K Pillai has said that a steep 50 per cent tariff imposed by the US on shipments from India would have a very small impact on India's economic growth of about 50 basis points if exporters are unable to find alternative markets. Terming the steep tariff imposed on India as discriminatory, he said others like China and many European nations also import energy from Russia, but the US has not imposed a penalty against them.

He stated ‘Impact of the US tariffs on India would be very small, say about 0.5 per cent, but it is going to affect labour-intensive sectors like textiles, gems and jewellery, seafood exports, chemicals, and so on.’ Moreover, he said ‘At least for 3-6 months, the profitability of Indian companies will come down. Some companies will be forced to lay off workers but I am sure that the government will take steps to see that this is mitigated.’

He added the government needs to take some steps to help exporters and industries to tide over the problem and they are incentivized to find new markets and new business models. The steep 50 per cent tariff on Indian goods entering the US, which came into effect from August 27, would impact exports worth more than $48 billion. The sectors which would bear the brunt of the high import duties imposed by the Trump administration include textiles/ clothing, gems and jewellery, shrimp, leather and footwear, animal products, chemicals, and electrical and mechanical machinery.