The 5 Ways India can benefit from Trump's tariff threats: Niti Aayog CEO's insights.
As US President-elect Donald Trump announces plans to impose 25% tariffs on Mexico and Canada and 10% on China, a jolt is poised for the global trade. But though there is a threat of trade war, India sees an opportunity, said Niti Aayog CEO BVR Subrahmanyam. He believed these higher tariffs can unlock great export opportunities for India if industries are well-prepared.
1. Scope for Export Growth
Trump’s tariffs on some of the US major trading partners leave space open for trade diversion, perhaps capturing part of the US demand in India.
The country exported goods worth $77.51 billion to the United States during the last fiscal year, and a much bigger scope exists.
There are potential gains, such as in textiles, engineering goods, and drugs.
2. A Boost for India’s IT Sector
The US is the biggest market for India’s IT export revenue, accounting for 70% of its total revenue. This makes it a very important partner in this sector.
A stronger trade relationship could help Indian IT firms win more contracts, especially in areas like AI, cloud computing, and cybersecurity.
This would mean higher revenues for Indian tech giants and more jobs at home.
3. Diversified Relationship with the US
India’s relationship with the US is not just about trade. It also includes defense, technology, and education.
This multi-dimensional alliance makes India a preferred ally in this time of global disruption
A stronger alliance with America can unlock investment opportunities both in infrastructure and innovation and the strategic sectors
4. Gain in Global Competitiveness
India can seek to benefit from the resultant supply chain shifts due to the tariffs by:
Bolstering domestic manufacture to meet the increased demand
Companies getting out of China due to tariffs might look to set up businesses in India.
India can become a manufacturing hub for the world, as it prepares its industries.
5. An Opportunity to Lead in Sustainable Trade
As the world talks of sustainable and fair trade, a country like India, which is emphasizing clean energy, digital transformation, and ethical manufacturing, will definitely become an attractive trading partner.
Challenges India Has to Overcome
However, there are challenges that India has to overcome.
Trump’s Criticism: His claims of India being a “Tariff King” and an “abuser” of trade rules show that there is friction in the air.
BRICS Warning: Trump has cautioned BRICS nations, including India, against challenging the US dollar’s dominance.
India needs to balance these tensions while positioning itself as a reliable and competitive trade partner.
Though this may lead to a threat of disrupting global trade for Trump, it also holds an opportunity for India in strengthening its position. A $77.51 billion trade relationship with the US and a robust IT sector besides potentially gaining attraction for supply chain shifts mean that India could emerge a critical player in the new dynamics of trade. As Niti Aayog CEO Subrahmanyam asks rhetorically, “The ball is coming in our direction. Are we going to hold it or drop the catch?
India can convert this moment into a gigantic economic boom by acting decisively and strategically.
Disclaimer: Stocks today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
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