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India's huge domestic consumption can offset export losses to US: GTRI

The Business Guardian

|

August 28, 2025

Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), noted that India can offset the loss of US trade to some extent through increased domestic consumption.

The 50 per cent Trump tariffs on India come into effect starting today, posing challenges for the country’s US-oriented exporters.

India broadly has two options to offset some of the US challenges, Srivastava, founder of trade think tank GTRI, noted.

“We have two broad options. One, the bigger option is that local markets. Our exports are just 20 per cent of Indian economy and Indian market is very big. It absorbs 80 per cent of Indian production and there is scope for further absorption of this because Indian economy is growing at 6 to 7 per cent annually,” Srivastava told ANI.

“Domestic consumption can “happily absorb” some of the shocks,” he said.

The second “great option” is to search for other countries to divert some of the exports that India cannot export to the US.

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