From April 9, 2025, Indian exports to the United States will be subject to tariffs as high as 26%, a sharp jump that reflects a shift in America’s trade policy. Trump has announced sweeping new reciprocal tariffs on several countries, including India.
The world economy is jolted as United States President Donald Trump’s sweeping new tariffs on foreign imports sent shockwaves through governments, investors, and industries worldwide. The sudden move prompted threats of retaliation from several countries and urgent calls for negotiations while markets struggled to absorb the impact of the aggressive policy shift. Economists described the tariffs as far more severe than anticipated, sparking a wave of panic selling as investors scrambled to offload shares in companies expected to bear the brunt of the new economic burden. Many view the tariffs as a de facto business tax likely to disrupt supply chains and raise costs across various industries.
It is to be noted here that Trump announced sweeping new reciprocal tariffs on several countries, including India. Highlighting the high tariffs imposed by India on American goods, Trump announced a “discounted reciprocal tariff” of 26 per cent on India, stressing his administration’s intent to address perceived trade imbalances. Holding up a chart during the event, Trump illustrated the disparities in tariffs levied by various nations such as India, China, the United Kingdom, and the European Union. The chart displayed how these countries would now be subjected to reciprocal tariffs by the US.
Can India benefit from Trump’s tariff?
While such protectionist rhetoric is aimed at revitalising American manufacturing, it could have far-reaching consequences for global trade. The big question: Can India benefit from this shift?
From April 9, 2025, Indian exports to the United States will be subject to tariffs as high as 26%, a sharp jump that reflects a shift in America’s trade policy. Previously, US tariff rates across its global trading partners hovered around 3.3% — among the world’s lowest. In contrast, India has historically imposed average tariffs around 17%, according to the White House. Despite this hike, experts believe India could actually benefit from the broader reshaping of global trade. With the US targeting Chinese imports with tariffs up to 54%, and similarly high duties on Vietnam (46%), Thailand (36%), and Bangladesh (37%), India now stands on a potential manufacturing launchpad.
According to the Delhi-based Global Trade Research Initiative (GTRI), the steep duties on rival exporters create new space for India in critical sectors such as textiles, electronics, and machinery. Indian textile exporters, could gain a stronger foothold in the US market, especially with Bangladeshi and Chinese competitors hit by heavier tariffs.
In electronics, India may not rival Taiwan’s lead in semiconductors, but it could find opportunities in packaging, testing, and entry-level chip manufacturing—provided it scales up infrastructure and policy backing, as per experts. Even a limited shift in the supply chain from Taiwan, which now faces a 32% US tariff, could offer India an opening. Sectors like machinery, automobiles, and toys—currently dominated by China and Thailand—are also ripe for a shake-up. India could woo global investors seeking alternatives and bolster its exports to the US if it moves swiftly and smartly, GTRI notes. India’s high domestic tariffs and reliance on global supply chains often push up manufacturing costs, reducing its competitiveness. Despite robust growth in services exports, India still faces a trade deficit and commands just a 1.5% share of global exports.
What IMF chief said on Trump’s tariff?
Reacting to the development, International Monetary Fund (IMF) Managing Director Kristalina Georgieva expressed deep concern, noting that the US tariffs “clearly represent a significant risk to the global outlook” amid an already fragile period of sluggish economic growth. “It is important to avoid steps that could further harm the world economy. We appeal to the United States and its trading partners to work constructively to resolve trade tensions and reduce uncertainty,” Georgieva said in a statement. Meanwhile, the IMF and World Bank will also hold meetings later this month to discuss the world economic outlook and other issues. US tariffs will be a part of that discussion, the Associated Press (AP) reported.
