India Weighs the Fallout of US Tariffs on Chemicals and Petrochemicals

India is closely examining the potential impact of newly imposed US tariffs on its chemicals and petrochemicals sector, a move that could reshape trade dynamics and industry profitability. The government is in active discussions with industry leaders to assess the extent of disruption and explore possible countermeasures.  

 

US President Donald Trump recently adjusted the tariff rate, reducing a planned 26% reciprocal duty to 10%. While this revision offers some relief, industry experts warn that the increased costs could significantly dent India’s chemical exports, which accounted for $5.7 billion in FY24. Analysts estimate that the tariff hike could slash exports by $2-7 billion by FY26, affecting demand for specialty chemicals and intermediates.  

 

Petrochemical exports, valued at approximately $4 billion in 2024, may also face headwinds, though certain petroleum oil sub-segments could be exempt, softening the blow. Meanwhile, concerns are mounting over potential dumping of Chinese chemicals into India, as Chinese firms—grappling with economic slowdown and surplus capacity—seek alternative markets.  

 

The government is expected to outline its response after further consultations with industry stakeholders, aiming to safeguard domestic manufacturers while maintaining trade stability.  

 

Sources: The Hindu Business Line, MSN News, Times of India