Tariff storm is approaching, Indian labor-intensive industries will face crisis.

Madhavi Arora, Chief Economist at Emkay Global, stated that India's 50% tariff on exports to the United States, along with exemptions, implies an effective tax rate of about 31%. If this higher tax rate persists throughout the year without any breakthrough agreements being reached, we expect India's labor-intensive industries such as jewelry and textiles to be severely impacted. Small and medium-sized enterprises have a high proportion of exports, which will further drag down employment prospects, casting a shadow on consumer demand outlook. We estimate that the annualized impact of the tariff hike will be between 25 to 50 billion dollars, depending on the severity of the issue. We believe that India's GDP growth forecast of 6.2% currently carries a downside risk of about 20 to 30 basis points.