Trump’s tariff game hands India a global trade edge
Donald Trump’s new tariff policy, unveiled on April 2, 2025, has jolted global trade with a 10 percent baseline tariff on all imports starting April 5, followed by steeper country-specific rates from April 9. India faces a “discounted” 26 percent reciprocal tariff—far less than China’s 54 percent or Vietnam’s 46 percent—offering a rare chance to outpace Asian rivals. Yet, experts warn India must seize this moment with bold reforms, or the opportunity will slip away.
The policy spares critical goods like pharmaceuticals and semiconductors, a boon for India’s export strengths, while slamming steel, aluminum, and autos with a 25 percent duty. China’s heftier tariffs open doors for India in textiles, electronics, and machinery, sectors where competitors like Bangladesh and Thailand now falter under 37 percent and 36 percent rates. “India can gain market share if it scales production and boosts competitiveness,” says Ajay Srivastava of GTRI. But here’s the catch: India’s creaky logistics, patchy infrastructure, and policy inertia could stall progress.
Trump’s move aims to shrink America’s trade deficit, a gripe he’s nursed for decades, spotlighting India’s 70 percent car tariffs against the US’s 2.5 percent. India’s relatively low $50 billion trade surplus with the US—dwarfed by China’s $320 billion—earned it leniency. Ongoing US-India trade talks, targeting $500 billion in bilateral trade by 2030, add leverage. Still, deep reforms—streamlining business rules, upgrading ports, and ensuring policy stability—are non-negotiable to turn tariff chaos into a manufacturing boom. India’s moment is now, but it must act fast or watch others cash in.
