Can India Trump's trading tariff bullet elude? Depends on the sector, trade treaty

Copyright © HT Digital Streams Limit all rights reserved. Markets, US President Donald Trump, announce new rates in the Rose Garden in the White House on April 2. AP/PTI (AP04_03_2025_000071A) (AP) Summary Trump’s 26% tariffs on Indian imports, with effect from April 9, target sectors such as textiles. However, the most important exports remain released, giving India a competitive advantage. The rates may dampen sentiment, but negotiations for a bilateral trade agreement can lead to adjustments in duties on both sides. US President Donald Trump announced on April 2 on April 2 announced reciprocal rates on its trading partners, which aims to reduce the country’s dependence on foreign products amid the lack of ballooning. Trump has announced a 26% tariff on imports from India, with effect from April 9. Companies in sectors such as clothing and textiles and chemicals, which have a greater exposure to the US, can bear most of the new tariff, given the risk of subdued post-order-order flow and price pressure amid disruption in global supply chains. That said, a silver lining is that the direct impact of this development on India is likely to be limited. “At first glance, the 26% tariffs imposed on India seem to be quite high, higher than India on most US items. Two of India’s exports of high ticket-it-services and pharmaceutical products seem untouched by this announcement (the latter in exempt list),” Bernstein said in a report of April 3. Read also | Are Trump’s tariff rates made up? Here is how they were also calculated, other countries in Asia were charged with relatively higher rates, so that India could gain a competitive advantage, even if limited. (See graph) “Items such as clothing and auto parts will see major tariff increases, but India appears to protect from a competitive point of view, as rates on various South Asian economies competing with India are even higher,” Bernstein added. Tariff exchange? The reciprocal rates are definitely a sentiment suppressant, but it is expected that trade partners, including India, would negotiate with the US to relieve some of them. In this background is a key event to note the bilateral trade agreement in India, which is likely to be finalized in the coming months. “A likely rash is a tariff exchange: The US can roll back the new 26% tariff in exchange for India that duties on cars (from 70% to ~ 25%, especially for EVs), Agri products (almonds, apples) and alcohol (wines/whiskey of 150%),” Prabhudas Lilladher said in a nota of April 3. ” Repair of GSP (general benefits system of preferences), and better market access, can remove. Read also | In maps: How is India to Trump’s reciprocal rates? Although India is a more domestic driven economy, it is not fully immune to the indirect/distribution impact of rising tensions in the global trade scenario. The fear of a global economic recession has come up again and the impact on inflation trends is crucial. According to Morgan Stanley, the impact on India will indirectly be expressed by poorer corporate confidence, which will hinder the risk of appetite and further postpone the capital expenditure cycle. The research home warns a disadvantage risk of 30-60 basis points on the GDP growth estimate of 6.5% for FY26. Among sectors, Indian IT firms may experience the heat, as customers in the US and Europe can delay their technology-related expenses out of the fear of an economic slowdown, thereby delaying the sector’s turnover track in FY26. Read also | Trump’s tariff strike: India hit 26% of duty, as the trade war for other countries in Asia such as Taiwan, Thailand, Malaysia and Korea, which is more export -oriented economies, Trump’s announcement can export the export of the execution of the execution. In addition, the reciprocal rates can have a negative impact on foreign exchange tariffs and weigh the interest rate decisions of Asian central banks. An important concern is that the steep tariff rates can put pressure on relieving faster monetary policy, as central banks strive to protect their economies from external demand shocks. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More topics #markets #market to maket #tariff hike mint specials