Trump maintains some “the hardest and vague non-financial trade barriers” on India and the U.S. He was accused of running a “large amount of” trade surplus.
The decision has been disturbed by the rupee, posted its best one -day reduction from May and has reached a five -month low on Wednesday.
US for Indian markets What is the meaning of the tariff
Nilesh Shah, MD of Kotak Mahindra AMC, calls the tariff move a clear negative for markets. He said that the US Despite the unexpected moves of the policy, the markets expected the tariff deal that the US-India strategic interests were finally set up.
He hopes that the cooler head will win and if both parties evaluate their red lines, the “support” (trade agreement on competitive Eings furings) can still be realized.
Living events
However, Shah also issued a cautious note, urging India to take this moment to accelerate the internal reforms that increase competitiveness.
“Our largest deterrence is our GDP size and productivity. Due to China’s scale and competitiveness is rejecting US pressure. India must learn from it.”
The deal could be signed in the mid -2025 with the hope that India and the US had opened a wide range of negotiations earlier this year. However, the disagreement of market reach, especially in agriculture and dairy, stops negotiations.
Trump has often used tariffs as a vague tool to force adherence – a playbook that seems to be returning with a new enthusiasm. If it should tighten the screw, India will only get the US. Not only, but globally, it may be forced to revive its trade strategy.
According to Ilara Capital EVP Garima Kapoor, the new tariff disadvantages India against export contestants such as Vietnam, Indonesia and the Philippines, which are enjoying a low tariff rate in the US market.
If pharmaceuticals are inserted into the tariff ambit, the damage can be significant. More than 30% of India’s pharma exports US Part of, which makes it the main pillar of India’s external trade.
Lack of clarity on whether high -value goods such as pharma and auto components and steel will be imposed equally, are increasing the market discomfort.
Kapoor warns that if there is no trade deal by September or October, India’s full -year GDP growth can see the improvement of at least 20 basis points. However, she notes that the delay may be a blessing in disguise.
“A hotchip OT deal that gave so much in agriculture and dairy can cost a lot of political and social. Even if delayed, the bargaining deal is better,” he said.
The ICRA said that now the US The tariffs (and penalties) proposed by are higher than our expectations, and therefore are likely to lead to India’s GDP growth. The extent of damage depends on the size of the penalty.
Overall, experts say the market has to live with instability and hopefully this pressure leads to a deal.
(Disclaimer: The recommendations, suggestions, opinions and views given by experts are their own. This does not represent the views of the economic time)
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