50% Tariff Hits 5 Key Sectors, Investors Advised to Take Note

The imposition of 50 percent import duty on Indian goods in the US has increased the concern of companies in 5 sectors. These sectors mainly include textiles, automobiles, diamond-jewellery, agriculture and shrimp industry. Companies are afraid of a decrease in demand in the US due to higher tariffs, which can have a major impact on business.

50 percent tariff has been implemented from August 27 on goods imported from India to the US (US Tariff on India). In such a situation, the concern of all those companies of 5 major sectors which export a large number of goods to the US has increased. These sectors mainly include textiles, automobiles, diamond-jewellery, agriculture and shrimp industry. These 5 exporting industries have suffered a major setback due to 50 percent tariff.

Experts believe that the goods exported to the US are mostly related to small and media enterprises, which account for 45 percent of the total exports from India to the US (Tariff Impact on India). Actually, due to higher tariffs, the margins of the companies of these sectors will decrease further and increasing competition will pose a big challenge for them. In such a situation, due to the decline in the growth of the companies, its direct effect will be seen on the shares.

Keep an eye on these shares

Big names of textiles industry: Vardhman Textiles, Welspun India, Arvind Fashion Private Limited, Nitin Spinners Limited, Pearl Global and Gokuldas Exports are included in many shares.

Automobile sector stocks: Bharat Forge, Sona Comstar, Sunsera Engineering Limited, Suprajit Engineering, Balakrishna Industries, Tata Motors (JLR Export and Eicher Motors) stocks may be affected.

Diamond and Jewellery sector stocks: Titan, Kalyan Jewellers, Goldium International Rajesh Export and other names are included.

Apart from this, stocks of companies related to agriculture sector and shrimp industry may also be affected due to 50% tariff.

Big headache for sectors

In fact, due to 50% tariff in America, the goods exported by Indian companies will become expensive, due to which the demand there will decrease. The result of this may be that companies will have to reduce production in India. This will affect the related sectors and the risk of job loss may increase.