Trump’s tariffs can manage India, providing room for Asian competitors to rise

Hyderabad: After several days of uncertainty, it was finally clear that India’s exports to the United States would face 26% responsibility – 10 percentage points higher than the basic tariffs for imports from any country to the United States. Since each country has to pay at least 10% import tax in order to sell its products in the United States, the penalty rate applicable to Indian products is 16%.
While investors may hate the situation where global free trade leaders are eager to tear it down, a calm analysis suggests that India escapes Trump’s attacks compared to other Asian countries. China will have to pay high tariffs of 54%, Cambodia 49%, Vietnam 46%, Sri Lanka 44%, Bangladesh 37%, Thailand 36%, Indonesia 32%, Pakistan 29%, 29% – giving India a considerable tara interest rate advantage.
In Asia, India will have a clear advantage in textiles and clothing on Bangladesh (faced with 37% tariffs) and Vietnamese footwear (46%) and Cambodia (49%). Similarly, India will enjoy an advantage over Sri Lanka (44%) and Thailand (36%) in toys, leather products and furniture.

In electronics and chemicals, India will have an advantage over China, which will have to surpass the 54% tariff wall. However, it will face fierce competition from the EU, which will assume 20% of the responsibility, down from India’s 6 percentage points. India will be at a 16 percentage point disadvantage compared to countries such as the UK and several Latin American countries (which faces a 10% import tax).

However, the coordinated approach of central and state governments and the innovative steps of the company can reduce India’s tariff disadvantage with these countries. For example, the central government can introduce next-generation reforms and improve logistics into legal remedies. The state government should reduce the number of interactions between businessmen and officials. Corruption is also a major contributor to India’s higher business costs.
In addition to governments, Indian companies also need to rethink their business strategies to become more agile and competitive. Currently, many companies in India are looking to own assets such as Land, which link valuable capital and does not directly contribute to production. If companies move to the asset lamp model (leasing land instead of buying land), they can reduce costs. The difference in cost control measures and internal corruption reflects poor management, and also raises costs and expands product prices.
Overall, Trump’s reciprocal tariff policy is manageable for India and has a lot of room for upside. But India must cheer up for the volatility of the global economic order or the potential global slowdown in the coming years. Trump called April 2 “Liberation Day.” It is true, but for the world, because he has been liberated from his dependence on the United States.