US Tariffs: US President Donald Trump mandates a 27% tariff on Indian goods to his country. Economists and economy watchers have opined that Indian exporters will face relatively less trouble. Moreover, amongst major Emerging Markets in Asia, India’s tariffs are the lowest, barring the Philippines.
Economic experts believe that India will be less impacted because its economy is inward-looking compared to export-dominated nations like China, Japan, Vietnam, and Sri Lanka.
Sonal Badhan, Economics Specialist at Bank of Baroda, said, “This may have a significant impact on US inflation and global trade dynamics. Exporters from India are likely to face relatively less trouble, as amongst major EMs in Asia, tariffs on US imports from India are the lowest (26%+ 10% baseline) barring the Philippines (17%+10% baseline).”
Meanwhile, industry body ASSOCHAM added that the tariff will bring a major realignment in global trade. “Tariffs unveiled by President Trump last night would bring a major realignment in global trade and manufacturing value chains. India has been placed somewhere in the middle of the tariff rates at 26% in addition to 10% baseline duties, which needs to be assessed for real impact,” said Sanjay Nayar, President, ASSOCHAM.
US Tariffs Kick In: What Other Economists Believe?
Debopam Chaudhuri, Chief Economist at Piramal Group, said, “Amidst all these, inward dependent economies like India should focus on bank liquidity so that they can lend freely to domestic retail borrowers and small business owners, to keep domestic consumption intact.”
Tax Partner at EY India, Kunal Chaudhary, believes that that tariffs imposed on Indian goods exported to the US present a dual-edged scenario for India’s manufacturing sector. “On the one hand, the relatively lower tariffs on Indian goods compared to those from China, Thailand, and Vietnam create a favourable arbitrage opportunity for Indian exports. However, on the other hand, Indian manufacturers may face intensified competition in other markets, as countries that traditionally focus on the US market may redirect their efforts to other countries to fill the potential void,” he said.
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