The U.S. slapped a 26% reciprocal tariff on India in a setback to the South Asian country's expectation of getting relief from President Donald Trump's global trade policy that has unnerved world markets for weeks.

India's $32 billion gems and jewellery industry is bracing for a sharp fall in exports as hefty U.S. tariffs will impede overseas sales to its biggest market, industry officials said.

Trump's reciprocal tariffs are poised to raise duties on Chinese imports to 54%. In addition, the White House is imposing a base 10% tariff on imports from most foreign countries.

Analysts believe that if these policies persist, they could drive significant inflation in the US, weakening demand and increasing recession risks

President Trump’s new tariff plan includes a 10% universal tariff on imports, followed by country-specific tariffs. China faces the highest tariffs, u

Swaminathan Aiyar warns that the world may be at initial stages of a potential prolonged trade war led by Trump, predicting severe global economic impacts. With high tariffs, industries like Apple's Indian plant may face significant export challenges.

Neelkanth Mishra, Chief Economist at Axis Bank believes India's electronics sector, which has seen increasing government incentives and manufacturing expansion, is likely to benefit from these tariff shifts.

Differential tariffs could have mixed effects on India, benefiting some sectors while negatively impacting others due to varying competition with other countries.

India benefits from lower US tariffs compared to rivals like China and Vietnam, but a bilateral trade agreement is crucial for long-term competitiveness.