The Goldman Sachs report has highlighted the potential impact of American definitions on the GDP of India (GDP). The report indicates that the gross domestic product in India can be affected by 0.1 to 0.6 percentage points if the US administration decides, during the era of President Donald Trump, to increase the customs tariff for all American imports to match the identification teams between India and the United States.
“Exposure to the local activity of India to the final demand for the United States will be almost twice (4.0 percent of GDP) that is given exposure to the United States via exports to other countries, and it is likely to lead to the impact of local local growth of 0.1-0.6p, mentioning the report.
The report also shows that, according to reciprocity at the product level, as tariff rates are matched on each product with those who are imposed by commercial partners, the average USA’s actual tariff for Indian imports may increase by 6.5 to 11.5 percentage points. This increase depends on the type of mutual tariff plan adopted by the United States.
“The added content of the local value in India in the total exports at 4.0 percent of GDP is almost in the middle between its Asian peers. Under this scale, the effect of GDP growth (from 6-11.5p in average is possible. Effective tariff rates in the United States) between about 0.1-0.6P.
Goldman Sachs also indicated that non -firearms, such as import and export support, represents a complex challenge. It is difficult to estimate these barriers for each commercial partner, which leads to focusing only on the tariff barriers. India’s exports to the United States are currently about 2 percent of its gross domestic product, which is relatively low compared to other emerging markets. Nevertheless, the customs tariff in the United States can still significantly affect the local economy in India.
The report adds that if the United States applies global definitions to all countries, the influence on India will be more fundamental. This scenario is likely to increase India’s final demand for the United States to about 4 percent of GDP, due to India’s exports to other countries that in turn export to the United States.
The surplus of the bilateral commodity trade in India with the United States has doubled over the past decade, reaching 35 billion dollars (1 percent of the gross domestic product of India) in the 24th year. This growth was primarily driven by electronics, pharmaceutical products and textiles. The tariff rates in India are generally higher than the US prices on most products, especially in agricultural products, textiles and pharmaceutical preparations.
President Trump emphasized a new trade policy that focuses on fairness and reciprocity, noting that the United States will implement a mutual tariff for accusing other countries on the same definitions imposed on American goods.