India reacted cautiously on Thursday to U.S. President Donald Trump’s sweeping tariffs, with the government saying it was examining both “implications” and “opportunities” from the duty hikes.
Indian stocks fell at the open of trading on Thursday, with the benchmark Nifty index trading more than 0.3% down in the afternoon.
Trump, speaking while unveiling the tariffs at the White House on Wednesday, said Indian Prime Minister Narendra Modi was a “great friend” but that he had not been “treating us right”.
India’s Department of Commerce said on Thursday it is “carefully examining the implications of the various measures”.
It also added in a statement that it was “studying the opportunities that may arise due to this new development”, a likely reference to regional competitors being hit harder.
An initial White House chart revealing the tariffs listed India at 26% but an annex cited by New Delhi put the duties at 27%.
Indian exporters said they were disappointed and relieved in equal measure.
“The tariffs slapped on India are definitely both high and higher than expected, which will hurt demand for our exports,” Ajay Sahai, director general of the Federation of Indian Export Organisations, told AFP.
But Sahai also pointed out that India was hit with lower levies than manufacturing rivals.
“Many countries which we compete with globally, including China, Indonesia, and Vietnam etc, have been hit harder than us,” he said.
“That opens up space for us to gain in terms of market share. But at the same time, if more countries retaliate and global trade gets hurt, this isn’t good for anyone.”
‘Competitive advantage’
A White House fact sheet said that pharmaceutical goods would be exempt from the reciprocal tariffs, providing relief to an Indian industry that shipped more than $8 billion in exports to the United States in the 2024 fiscal year.
Indian Pharmaceutical Alliance secretary general Sudarshan Jain said that showed “the critical role of cost-effective, life-saving generic medicines in public health, economic stability, and national security”.
New Delhi is also in the process of negotiating the first tranche of a bilateral trade agreement with Washington.
India sought to reduce trade tensions with Washington in the run-up to Trump’s “Liberation Day” announcement by cutting tariffs on some products, including high-end motorcycles and whisky.
Experts say that India’s future policy responses should also take into account China’s next steps.
“Asia has been hit much more than India on tariffs,” said Madhavi Arora, chief economist at Emkay Global Financial Services.
“China’s survival response to the massive tariff blow will matter for India, amid its excess industrial capacity and dumping in the world/Asian markets.”
Global Trade Research Initiative, a New Delhi-based think tank, said the tariff shakeup “presents an opportunity for India to strengthen its position in global trade and manufacturing”.
It said India had been handed a “competitive advantage” in several key sectors, highlighting textiles and garments, with Chinese and Bangladeshi rivals hit by high tariffs.
