On August 28, 2025, the day after higher American tariffs were imposed on many goods exported from India, Roger Hearing of the BBC World Business Report had me as his first guest.
Here is a transcript of the conversation. I believe that the USA and India will eventually resolve this issue; but there is serious short term pain on both sides.
BBC World Business Report Interview
Thursday, August 28, 2025
Roger Hearing: Hello and welcome to World Business Report from the BBC World Service. I’m Roger Hearing and on this edition, India moves into the era of 50% tariffs on many of its exports to the U.S. For some businesses it’s a small bump in the road, for others, it’s a disaster. Joining me now is Gunjan Bagla, Chief Executive of Amritt, Inc., a consultancy firm based in California specializing in trade between India and the U.S.
Gunjan, thanks for being with us here on World Business Report. How important is all this to either the U.S. or India? Does it actually matter to either side that much?
Gunjan Bagla: Well, thank you, Roger. And yes, it does matter quite a bit to both sides. If you look at it as the overall percentage of Indian GDP, it’s not large. However, the sectors that are affected are going to be affected very deeply.
So if you’re a young American man and you want to buy an engagement ring for your fiancée, most of the diamonds are polished and perfected in the city of Surat in Western India. So if the price of diamonds goes up by 50%, I think young men will have a pretty tough time buying those diamonds. If you look at markets such as automotive parts, and if you go into an auto parts store here, the batteries, the radiators, the alternators, many of them are made in India because India has a very vibrant auto parts industry. And those costs for the 50% tariffs are definitely going to be passed on to the buyers and ultimately to American consumers. So there will be an effect in many, many industries. I grew up in the town of Kanpur, which has a very large leather industry. There are hundreds of small businesses that process and finish the leather, many of them would be at risk of going out of business because they depend on the U.S. as their primary market. And 50% tariff is not something that they can withstand.
Roger Hearing: Indeed. And Gunjan, let me pursue that point and say, well, surely in these cases, they’ll have to make new arrangements. Someone described it to me as the way water comes downhill. In the end, it finds its own path. So people will find their own path perhaps to exporting to other countries. So what’s coming in now? Could be permanent changes?
Gunjan Bagla: You see, we believe that these tariffs are temporary. In fact, just yesterday Treasury Secretary Scott Bessent said on Fox Business, “The largest economy in the world and the largest democracy in the world will find a way to settle this.” Finding another customer for a commodity like rice or sugar is easy. But if you have customized orders for auto parts or even diamonds, these are not commodities, and the buyers in the U.S. are large companies as are the buyers in Europe and other countries. And it’s not easy to simply replace one customer with another. So some people will want to wait, some will struggle and try, and others may just decide that they can’t handle this and lay off most of their staff. So the impact will be uneven and distributed. It’ll be felt in India as well as in the U.S. for products that American consumers and American companies need. Two big sectors are excluded for now. One is pharmaceuticals. 40% of the pharmaceuticals bought, you know, generic pharmaceuticals, are produced in India and so are electronics. So my next iPhone will not be affected because Apple is producing something like $80 billion of iPhones in India and those sectors apparently are omitted from tariffs for now at least.
Roger Hearing: Yes, and in those circumstances briefly, do you see room for this coming back together? Do you think there will be more discussions and it will change?
Gunjan Bagla: Oh, yes, absolutely. The two countries are aligned in many ways. In fact, just yesterday, there was a dialogue between the U.S. and India’s State Department and Defense Department. Both countries are aligned to have a free and open Indo-Pacific. Both countries are aligned for each other’s prosperity. So this is a minor tiff in the big picture and much of it is driven by the Ukraine war. My expectation is that both countries will ultimately find a solution. But in the meantime, people will suffer and businesses will not want to ship large quantities of anything at 50% tariffs.
Roger Hearing: Well, clearly not, because obviously it doesn’t work for them. Gunjan, thank you so much for being with us. Gunjan Bagla there of Amritt, Inc.
Last updated: December 26th, 2025
