India has the potential to gain from U.S. tariffs, says GTRI report

A GTRI report says India is likely to gain from the tariffs levied by the US that will come into effect from Wednesday

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.

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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.

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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.