New Delhi:
Hours after India was slapped with a reciprocal tax of 26% on all goods exported to the United States, Aam Aadmi Party (AAP) MP Raghav Chadha on Thursday said he had warned about the impending taxes by the Donald Trump administration, and its effects on the Indian economy.
In a post on X, Mr Chadha shared a video of his speech he delivered in the Rajya Sabha in February, when he spoke of how the US’ tariffs would have an adverse effect on the Indian economy.
“How will the TRUMP TARIFF wreck the Indian economy? I had forewarned about this in Parliament on February 11, 2025,” he wrote on the micro-blogging site.
On Wednesday, Mr Trump announced a 26% tariff on all goods being exported by India to the US, amidst reciprocal tariffs in the range of 10%-49% unveiled by Trump for other countries. The US has a trade deficit of $46 billion with India, according to Reuters. Nearly $14 billion worth of electronics products and over $9 billion worth of gems and jewellery are among the top sectors to be hit by the tariffs. While the 26% tariff will not apply to auto parts and aluminium products, those will still attract the 25% tariff that Mr Trump had announced earlier.
In his speech in the Upper House during the first half of the Budget Session, Mr Chadha had also said that the IT sector would be the biggest sufferer as India’s 80% of the exports are sent to the US.
The Rajya Sabha MP also explained how the tariffs would impact the textile industry in India. “Imagine a buyer in the US is buying a shirt from a manufacturer in India. Today, the shirt costs him Rs 100. But if the Trump administration imposes a tariff of 20 percent on shirts, then the item will be made available for Rs 120 to the American buyer. The buyer will prefer to buy a shirt for Rs 104, Rs 105 or Rs 108 from a manufacturer in countries like Vietnam, Philippines and Bangladesh. This is how the tariffs will work, leading to drop in exports and demand, closure of factories and loss of jobs,” he said.
How will the TRUMP TARIFF wreck the Indian economy?
I had forewarned about this in Parliament on February 11, 2025 pic.twitter.com/BEi8zxY88H
— Raghav Chadha (@raghav_chadha) April 3, 2025
The Trump administration is going to impose a 15-25% tariff on textiles, Mr Chadha told the House. “The cost advantage for Indian manufacturers will be reduced. Sourcing or buying from India will reduce. Estimates suggest two millions jobs will be closed. Ludhiana has a lot of such hubs, besides Tamil Nadu and Gujarat; everyone will suffer,” he said.
Speaking about the impact on the pharma industry, the AAP lawmaker said: “Forty percent of US’s drugs are supplied by India. Such tariffs will have a huge impact on the Indian pharma industry and will lead to revenue and job losses.”
He also said that a 25% tariff was proposed for Indian auto companies. “A 14 billion dollar trade will be impacted. Indian manufacturers’ demands and exports would reduce and more than 10 lakh people would lose their jobs,” he said.
Mr Chadha said those losing their jobs would be added to the existing unemployed workforce in the country.
“Another impact is that the forex reserves will go down. The rupee will weaken further and the dollar will be strengthened. India’s corporate tax collection will be affected,” he said.
He also alleged the Indian government acts on the instructions of the US government. “The US says buy less oil from Iran, we do that. The US says buy defence equipment from us, we buy helicopters from them,” he said.
He also alleged that several people in India, including supporters of the ruling Bharatiya Janata Party (BJP), tried to ensure Mr Trump’s win in the Presidential elections last year. “But what did we get in return? Indians who had dreamt of building a life in the US were sent back in shackles,” he said, referring to deportation of illegal Indian immigrants, some of whom were shackled and restrained throughout the flight, till their arrival in India.
