India responds cautiously to U.S. tariffs, with exporters noting the impact on exports could have been worse. Despite a decrease in the stock market, India may gain market share as its tariffs are lower than several competitors. The pharmaceutical sector remained unaffected, highlighting its importance. Future strategies will require attention to China’s actions.

On Thursday, India cautiously responded to the tariffs imposed by U.S. President Donald Trump. Exporters stated that the 26 percent flat tariff could have been worse, despite a decline in the Nifty index by nearly 0.3 percent during morning trading. Trump commented on Indian Prime Minister Narendra Modi, referring to him as a “great friend” while criticizing trade treatment.

While the Indian government has not yet publicly reacted, exporters expressed disappointment mixed with relief. Ajay Sahai, director general of the Federation of Indian Export Organisations, remarked, “The tariffs slapped on India are definitely both high and higher than expected.”

However, Sahai noted that India faced lower tariffs compared to rivals like China, Indonesia, and Vietnam, potentially creating opportunities for increased market share. He warned, though, that retaliatory tariffs from other countries could negatively impact global trade.

India’s pharmaceutical sector, exporting over $8 billion to the U.S. in fiscal year 2024, remained unaffected since drugs were exempt from tariffs. Sudarshan Jain from the Indian Pharmaceutical Alliance emphasized the importance of generic medicines in public health and economic stability.

Additionally, India is negotiating a bilateral trade agreement with the U.S. Experts highlight the necessity for India to consider China’s responses to the tariffs. Prior to the announcement, India aimed to ease trade tensions by reducing tariffs on products including motorcycles and whisky.

Madhavi Arora, chief economist at Emkay Global Financial Services, noted that Asia faced more significant tariff impacts than India. Ultimately, the Global Trade Research Initiative in New Delhi argued that the tariff changes present a chance for India to enhance its global trade and manufacturing position, particularly benefiting sectors such as textiles and garments.

In summary, while India faces significant challenges from the recent tariffs imposed by the United States, it also sees potential opportunities for growth in certain sectors. The pharmaceutical industry, in particular, remains resilient, while lower tariffs compared to regional competitors may allow India to gain market share. However, the response from other nations and China’s next steps will be crucial in shaping India’s trade strategies moving forward.

Original Source: www.ndtv.com

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