Can India Dodge Trump's Tariff?

US President Donald Trump announced sweeping reciprocal tariffs on its trading partners on April 2, a move aimed at reducing the country's dependency on foreign products amid its ballooning trade deficit.

- Harsha Jethmalani

Trump announced a 27% tariff on imports from India, from April 9.

Firms in sectors such as apparels & textiles and chemicals, which have higher exposure to the US, may bear the brunt of the new tariff, given the risk of muted near-term order flows and pricing pressures amid the disruption in global supply. A silver lining is that the direct impact of this development on India is likely to be limited.

"At first glance, the 27% tariffs imposed on India seem rather high, higher than what India levies on most US items. However, two of India's high-ticket exports—IT services and pharmaceuticals, are untouched by this announcement," Bernstein said on April 3. Also, relatively higher tariffs have been levied on other Asian nations, so India may get a competitive edge.