Bengaluru, Nov 12 (UNI) With Donald Trump’s return to the White House raising concerns about potential tariff hikes, Indian experts on Tuesday suggested the new administration might use tariffs more as a bargaining tool than as an outright deterrent to trade.
United States account for USD 77 billion in Indian exports and a net trade surplus of USD 35 billion, but India’s position may still hold steady, despite the looming uncertainty, they said.
Piramal Group Chief Economist Debopam Chaudhuri indicated that while tariffs may be adjusted, the impact could be less severe than anticipated. “The US administration is likely to use tariffs more as a bargaining tool than as an outright deterrent to trade,” he told UNI on Tuesday, pointing to the continued US interest in Indian industries such as defence, renewable energy, technology, and infrastructure.
These sectors are expected to retain momentum and could even benefit as a depreciated Indian Rupee (INR) enhances the value of investments for US companies.
Some Indian sectors, including chemicals, metals, machinery, and electronics, could face challenges from tariff adjustments, but only if a broader slowdown dampens US demand. Meanwhile, heightened tariffs on Chinese imports might shift demand toward Indian goods, particularly in areas where the two countries compete.
Adding to the complexity, Chaudhuri warned that China’s currency adjustments to counter tariffs could pressure the INR to depreciate in kind, helping India keep its exports competitive in global markets.
With protectionism becoming a hallmark of the post-COVID trade landscape, India may need to adapt quickly to a complex environment as countries, including the US, balance trade with domestic economic priorities.
