Impact of Trump's tariffs 'minimal' on India: Experts

The country's economy will remain strong despite new US tariffs, with a projected slowdown of just 20-40 basis points: Analysts

- Issac John

India, the world's fifth-largest economy, is poised to emerge relatively unscathed from a new torrent of tariffs under President Trump's "Liberation Day" plan.

While the move has sparked concerns over potential disruptions in international commerce, experts argue that the impact of these tariffs on India's economic trajectory will be minimal, with a projected slowdown of just 20-40 basis points in the current financial year.

In the face of global trade headwinds, India's strategic positioning and policy adaptability may allow it to not only weather the storm but also capitalise on emerging opportunities. As the world navigates shifting trade dynamics, the fastest-growing major economy's expansion remains firmly on track, say economists.

More importantly, the nation's strong domestic fundamentals, coupled with lower tariff exposure compared to peers, may even allow India to turn this challenge into a strategic advantage. Trump's measures, designed to enforce reciprocal trade terms, also target several major economies, including China, Brazil, Japan, and the European Union.

According to Goldman Sachs, the tariffs could increase the total effective tariff on Indian goods by 19.5 per cent, potentially reducing exports by $15 billion approximately 0.4 per cent of India's GDP. While this figure may seem concerning at first glance, a deeper analysis reveals a more resilient outlook.