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Huge cranes loading containers on to ships at port in Chennai on April 8, 2025.
| Photo Credit: AP
Even as the 27 % tariff announced by the US President Donald Trump is all set to come into effect from Wednesday, and the Indian Commerce and Industry Minister Piyush Goyal, scheduling a meeting with Indian exporters on April 9, a report by the Global Trade Research Initiative (GTRI) says India may benefit because of relatively higher tariff for other Asian countries.
The GTRI report says if the Indian government carries out reforms to enable scaling up of production, improve domestic value addition, and enhance competitiveness of Indian industries, India can gain from the tariffs.
Also Read | Donald Trump announces 26% ‘discounted reciprocal tariff’ on India
Goods from India face 25 % tariff on steel, aluminium, and auto, there are no tariffs on pharmaceuticals, semi conductors, copper, or energy products, and other products attract 27 % duty.
“(The) gains will not accrue automatically. India needs deep reforms for enabling scale production, domestic value addition and improving competiveness to benefit. The new Trump tariffs offer opportunity but they come with big dose of unpredictability,” the report said.
Also Read | Trump tariffs: Sectors in India that find themselves in a spotlight
Many investors will prefer to wait for stability in the tariff regime before investing in countries that the new tariffs have made attractive. India has gained a natural competitive advantage in several key sectors. One such is textiles and garments. The high tariffs on Chinese and Bangladeshi exports are expected to help India gain market share, attract relocated production, and increase exports to the U.S.
In the electronics, telecom, and smartphone sectors, countries such as Vietnam and Thailand are likely to lose cost competitiveness due to the steep tariffs, opening up opportunities for India. “As global brands seek to diversify supply chains away from high-tariff countries, India can emerge as a preferred destination for new manufacturing setups and component assembly lines,” it said.
Similarly, sectors such as machinery, automobiles, and toys, where China and Thailand currently have a dominant presence, are also vulnerable to tariff-related relocation. India has the potential to attract foreign direct investment in these areas with strategic planning, and scale up domestic production.
In order to fully leverage these opportunities, India must enhance its ease of doing business, invest in logistics and infrastructure, and maintain policy stability, the report added.
Published – April 08, 2025 01:12 pm IST
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India has the potential to gain from U.S. tariffs, says GTRI report
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