Impact of US Trade Measures on Indian Businesses

Amit Mitra, Chief Financial Adviser to the Chief Minister and a former state finance minister, has raised concerns regarding recent US trade measures, stating they have plunged Indian businesses into uncertainty.

Key Concerns

• Mitra highlighted that US actions threaten exports worth billions, endangering supply chains and jobs in labor-intensive sectors.
• He differentiated between risk and uncertainty, noting that Indian firms traditionally take calculated risks but now face strategic uncertainty.

US Trade Measures

• Exports to the US, quantified at $86.5 billion, are under threat due to a series of unilateral US measures.
• Notable US actions include: 
  1. Invocation of emergency trade powers.
  2. Levies of reciprocal tariffs.
  3. Penalties for purchases of Russian oil, leading to increased tariff pressure on India.
  4. Use of Section 232 of the US Trade Expansion Act of 1962 to impose steep duties on steel and aluminium.
  5. Plans for a 100% tariff on branded and patented drugs exported to the US.

Potential Impact

• Mitra warned about the disruptive impact on multinational pharmaceutical manufacturers exporting from India.
• He cited Pfizer's response to offer discounted medicines via a US government portal as evidence of the tariffs' potential disruption.
• The measures could leave Indian exporters, MSME supply chains, and millions of workers in labor-intensive exports in limbo.

Criticism of Central Government

• Mitra criticized the central government for its handling of the situation, accusing it of failing to provide strategic leadership.
• He emphasized the need for policy responses to reduce uncertainty and stabilize global value chains.

Industry and Policy Response

• Mitra's remarks align with industry concerns about the impact of sudden trade measures on exports, investment, and jobs.
• The situation is likely to spark debate over diplomatic and trade responses to protect commerce and livelihoods.