US tariff may impact India's GDP between 0.1-0.6 per cent: Goldman Sachs
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The report which analyses the impact of US tariffs on India's GDP under country-level reciprocity, product-level reciprocity says, «India's domestic activity exposure to US final demand would be roughly twice as high (4.0 per cent of GDP) given exposure to the US via exports to other countries, and would likely result in a potential domestic GDP growth impact of 0.1-0.6pp.»
If Trump administration chooses to increase the tariff on all US imports by the average tariff differential between a particular country and the US. Under this scenario, the average US effective tariff rates on Indian imports would increase by 6.5 percentage points.
Under product-level reciprocity if the Trump administration matches the tariff rates on each product levied by its trading partner. The report estimates the weighted average effective US tariff rate on Indian imports could increase by 6.5-11.5 percentage points depending on the kind of reciprocal tariff plan adopted.
If Non-tariff barriers or administrative barriers are applied for import licenses, export subsidies etc. The report says it will be the most complicated version of reciprocal tariffs to administer and given the complexity of estimating the cost of non-tariff barriers for each trading partner, the report avoided commenting on this and limited its analysis to tariff-related barriers only.
