India's Strategic Advantage in Global Trade

In a surprising move, the U.S. has announced a 90-day pause on higher reciprocal tariffs, signaling a potential shift in trade policy. This development comes as a significant opportunity for India to strengthen its position in global manufacturing and trade.

By Kunal Chaudhary

The Impact of U.S. Tariffs on China

The U.S. has increased tariffs on Chinese goods to 125%, citing retaliation and lack of respect. This move is expected to disrupt global supply chains, pushing American companies to seek alternative suppliers, with India poised to benefit significantly.

Electronics Sector: A Key Opportunity for India

India's electronics exports, valued at nearly USD 14 Bn, stand to gain from the U.S. tariffs on Chinese imports. With global brands like Apple already utilizing India as an export hub, the country could see a surge in production and exports of electronic devices and components.

Strategic Initiatives and Future Prospects

India's Production-Linked Incentive (PLI) schemes and the potential for a Bilateral Trade Agreement (BTA) with the U.S. could further enhance its competitiveness and role as a global manufacturing hub. The temporary tariff suspension offers India a unique window to deepen economic cooperation and accelerate growth.

(Kunal Chaudhary is Tax Partner, EY India. Vaibhav Anand, Director-Tax, EY India, also contributed to the article.)