Article – U.S. May Reduce Tariffs on Indian Exports – Nomura

Jai Siya Ram

Key Forecast (Nomura)

  • Current Status: The United States levied 50% tariffs on Indian exports—a combination of a 25% reciprocal tariff and an additional 25% penalty related to India’s continued purchase of Russian oil.
  • Nomura’s Prediction: The extra 25% penalty is expected to be lifted by November, reducing the overall rate to 25% going forward. This base tariff is projected to remain in effect through FY2026.
  • Macroeconomic Impact: Despite this expected relief, Nomura has revised India’s GDP forecast down to 6.0% from 6.2%—citing weaker exports, rising unemployment, and decelerated private investments.
  • Monetary Outlook: The firm anticipates two repo rate cuts of 25 basis points each by the Reserve Bank of India, possibly in October and December, potentially taking the rate down to 5% by year-end.

Strategic Analysis

  • Temporary Relief Insight: Removing the penalty tariff may restore some competitiveness to India’s exports, especially in textiles, jewelry, and other affected sectors.
  • Lingering Pressure: A 25% base tariff remains significantly high compared to peers and will continue to strain trade performance and export-led industries.
  • Policy Tailwinds: RBI easing could help buffer domestic shortfalls—especially in sectors impacted by tariff pressure.

Chandan Singh

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