Tariffs imposed by Trump on India: Could counter tariffs against the US advantage India, according to experts? Opinions are shared

The United States has imposed 50% tariffs on India, threatening $45 billion worth of India's exports, according to recent reports. This development has sent ripples through the Indian economy, with IT stocks facing pressure due to concerns about the economic fallout of these tariffs on the US economy.

The tariffs are estimated to affect US GDP by 40-50 basis points and result in higher input cost inflation. If they stay in place for a year, they could shave off 60-80 basis points from India's GDP growth.

Sujan Hajra, Chief Economist & Executive Director at Anand Rathi Wealth Limited, suggests a calibrated response to avoid self-inflicted harm. He believes that India may roll out retaliatory measures, but will stop short of provoking an all-out tariff war, leaving room for negotiations. Hajra also notes that the new tariffs affect a wide range of Indian exports and are higher than what other Asian countries face.

G. Chokkalingam, Founder & Head of Research at Equinomics Research, shares a similar view. He warns that a reciprocal tariff by India could put India in a difficult situation due to its substantial IT service exports to the US. Instead, he suggests boosting domestic demand, taking more aggressive steps to sign free trade agreements, and leveraging the India, Russia, China alliance to counter the tariffs.

Analysts suggest a solution for India through diplomatic channels, strengthening of the domestic economy, and trade deals with other nations to mitigate the impact of the tariffs. Countries like China, Latin American nations, and those in the Middle East could benefit from India's difficulties under the Trump tariffs, as India is encouraged to redirect its exports to these markets to strengthen its economy.

However, a tit-for-tat tariff by India might not be in India's best interest, according to analysts. The higher tariffs could make Indian products less competitive, potentially benefiting countries like China and Vietnam. The US remains India's largest export market, and the US and China have reached an agreement to de-escalate tensions and temporarily lowered tariffs to 30% on the US's side and 10% on China's part.

It is important to note that the views expressed in this article are those of individual analysts or broking firms. Investors are advised to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary. The article does not contain any advertisements.

Tariffs imposed by Trump on India: Could counter tariffs against the US advantage India, according to experts? Opinions are shared