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00:00We start in the U.S. with President Trump's trade war because today it has a new target.

00:06As of nearly two hours ago now, midnight in Washington, 9.30 a.m. in Delhi,

00:12most Indian goods imported into the U.S. face a 50% tariff. The U.S. imposed a 25% import tax

00:20earlier this month because of what the administration sees as an unfair trading

00:25relationship between the two. Now, it's doubled the rate as punishment for buying oil from Russia.

00:31So let's just give you a sense of what's involved here, looking at some of the numbers. To start with,

00:36last year, the United States was India's biggest trading partner with bilateral trade

00:41worth $190 billion. But here are the numbers President Trump is upset about. India sells a

00:50lot more to America than the other way around. So last year, the U.S. ran a trade deficit with India

00:55of almost $46 billion. Proof to President Trump the relationship, in his view, is unfair.

01:03And here's the other bone of contention. India imports most of its oil, last year almost 40%

01:09of its crude, from Russia. Well, President Trump is saying India is helping Russia fund the war in

01:16Ukraine. Earlier this month, he accused it of not caring how many people in Ukraine are being killed

01:22by the Russian war machine. India's Prime Minister Narendra Modi is defiant on all of this. On Monday,

01:30his ambassador to Russia said India will continue to buy oil from wherever it gets the best deal in

01:36order to protect the interests of its 1.4 billion people. So how hard will these tariffs hit India?

01:43One U.S.-based expert has told us the overall impact on India's vast economy will be limited.

01:50Well, you know, the trouble is that a lot of the discussion has been very alarmist based on

01:55absolute numbers, you know, because India exports about $70 to $80 billion worth of merchandise. But

02:01honestly, when you look at it, it's about two to three percent of India's GDP is the merchandise

02:07exports to the U.S. And of that, some very significant exports have actually been exempted.

02:14So medicines have been exempted and services, which is the big one, have been exempted as well.

02:21Well, many Indian companies and workers will be hard hit, though. Our Mumbai correspondent,

02:26Archnush Shukla, has been talking to a company boss who's a major exporter to the U.S.

02:31Well, yes, there is a scramble here amongst businesses focused on the U.S. market. They

02:38are anxious, they're nervous, but there is also acceptance that the 50 percent tariffs are here

02:43now, at least in the short term, and businesses are trying to brace up for the impact. I have with

02:49me Vishwanshu Agarwal. He's a textile manufacturer and exporter who has businesses across the value

02:56train from weaving to finished goods, apparels, etc. Vishwanshu, the 50 percent tariffs are a reality

03:01today as we speak. What's really happening on the ground right now when we talk about factories

03:07like yours are focused on the U.S. market? Sure. First, Archn, I would like to thank you and BBC for

03:13giving me this global platform to express on behalf of the industry how we are dealing with these

03:19uncertain times. So, yeah, Archn, coming to your question, customers are now, you know, with this

03:2650 percent tariff, especially U.S. customers, only U.S. customers are not, you know, willing to sort of,

03:33they can't absorb these kind of margins in our industry and they are definitely looking for

03:38alternatives. So, you know, orders haven't been coming in lately and things are not good, orders are drying

03:46up and things are not very good at the moment. Well, in terms of production, have you stopped

03:52producing or are you still working your factories? No, we are still working. So, what we are doing

03:56currently, being slightly larger and more, this is impacting us a little more, we are offering some

04:02discounts to the customers to sort of navigate through these tough times. So, we believe eventually

04:08that this, we hope that these tariffs don't continue at least the second 25 percent and I think

04:15in the next five, six months, if you can absorb these losses, then we can, you know, move forward

04:22from there. Right. You know, if these 50 percent tariffs stay on for longer, what are the contingency

04:28plans that you are working with? So, the contingencies that we are looking at is the usual markets,

04:34the bigger markets, the economies like U.K., Europe and even emerging markets like South America and UAE.

04:39So, we are looking to try and build a relationship with them and work with them. And even India,

04:44you cannot ignore as a sector, you know. It's a very, it's a very important sector and highly,

04:50the consumption is growing every year. So, it's a very important sector.

04:54And, you know, what are the kind of policy support that the industry, particularly the textile

04:59industry, is seeking from the government, especially for small businesses?

05:02So, one is, you know, Archana, incentives are important. Direct incentives for the exports

05:07that we do to the U.S., they need to help us with increasing that. The second is, you know,

05:13some kind of incentive, worker incentives, bank moratoriums and even the government, you know,

05:20this U.K. FTA that was signed recently by our government has helped to get a lot of traction

05:25into India. It should be signed any moment now. Similar, if we can do with other countries like

05:30Europe, this will really help the industry further.

05:34Right. Thank you, Vishwanchu. You know, these are exporters who are looking at alternate markets,

05:38they're looking for some policy support, but they also know that in the short term to medium term,

05:43the impact that the U.S. drop in business would happen will not be offset. So, it will be a major

05:50impact, especially for export driven sectors here in India. We are looking for some small businesses

05:55that might fold and they would need more amount of support. And also, the hope is that U.S. India

06:02go back on the table to talk trade and get to a resolution on this.

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