Piyush Goyal on US Tariffs: Only 1% of GDP Affected

Union Commerce and Industry Minister Piyush Goyal has asserted that the recently imposed 50% tariffs by the United States on Indian goods will have only a minimal effect on India’s economy, stating that the country’s economic fundamentals remain robust and resilient.

Speaking at the NDTV Profit GST Conclave, Goyal emphasised that merchandise exports comprise only about 10% of India’s Gross Domestic Product (GDP), and therefore the broader economy is largely insulated from such external shocks.

“First of all, we should understand that the total merchandise export of India is only 10% of the country’s GDP. Secondly, our imports are more than our exports, which means our GDP is not dependent on our exports,” Goyal said. “Actually, the GDP gets reflected because imports are comparatively higher.”

He further underlined that only about 1% of India’s GDP is tied to exports directly impacted by the new US tariffs, calling the fears of an economic slowdown “overstated.” Goyal pointed out that India’s export basket has low domestic value addition, meaning any disruptions in exports tend to be offset by a simultaneous fall in imports.

“During the COVID period, people predicted a collapse in exports and GDP. But what actually happened is that our imports dropped faster, and we became a current account surplus nation. So this is not going to have any significant impact on GDP,” he added.

Piyush Goyal: Limited Sectoral Impact – Jewellery, Textiles, and Leather in Focus

Breaking down the impact by sectors, Goyal noted that jewellery exports contribute only about 3–4%, while other major sectors remain unaffected. However, three sectors—textiles, garments, and leather products—may face some headwinds.

• Leather exports could see an impact of around $2 billion

• Gems and jewellery may be affected by around $1 billion

Despite these figures, Goyal reaffirmed that India’s export-dependent share is too small to dent its overall economic momentum.

Consumer Enthusiasm and GST Boost

The minister also drew attention to rising consumer enthusiasm following recent GST rate cuts, saying that the willingness of households to spend indicates a vibrant domestic market. “Every household is eagerly discussing purchases on September 22,” he noted, framing it as a positive sign for India’s consumption-driven growth.

Piyush Goyal: India’s Global Investment Magnetism

Highlighting India’s demographic dividend, Goyal said the country produces 2.3 million STEM graduates annually, with half of them being women, presenting an unmatched talent pool to global investors. This, he said, gives India a competitive edge as a future manufacturing and innovation hub.

Progress on India-US Trade Agreement

In a related development, Goyal revealed that the first tranche of the long-anticipated India–United States trade agreement is expected to be finalised by November 2025, signalling steady progress in talks between Narendra Modi and Donald Trump-led administrations.

“In February 2025, Prime Minister Modi and President Trump instructed us to conclude the first part of the agreement by November 2025. Since March, discussions have been going on very seriously, and both sides are satisfied with the progress,” Goyal said at a press conference in Patna.

The remarks come against the backdrop of efforts to ease long-standing trade barriers between the two democracies. In a recent post on Truth Social, Trump also signalled optimism about reaching a breakthrough in the tariff standoff, calling Modi his “very good friend” and expressing confidence that both nations will reach a “successful conclusion.”

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