India Poised to Gain from Trump's Tariff Policies: Shriram Report

India is positioned to benefit from trade opportunities amid potential disruptions due to US President Donald Trump's proposed tariffs on China, Mexico, and Canada. Shriram Mutual Fund highlights the potential for India to capture new export markets as global trade patterns shift.

According to a report by Shriram Mutual Fund, India has a noteworthy chance to benefit from export prospects due to anticipated trade disruptions sparked by incoming US President Donald Trump's tariff policies. The analysis suggests that Trump's tariffs on leading US import partners—China, Mexico, and Canada—could cause trade diversion, potentially favoring nations like India.

The report states, "India stands to gain from export opportunities as trade disruptions resulting from US tariffs on China, Mexico, and Canada may lead to trade diversion." It mentions Trump's threats to implement substantial tariffs as part of his economic agenda, aiming to safeguard American industries and respond to de-dollarization challenges.

The proposed tariffs include an additional 10% on Chinese imports and 25% on Canadian and Mexican imports. Such policies could disrupt trade streams, providing avenues for Indian exporters to seize market shares. "Trump threatens tariffs due to de-dollarization; Plans include 10% additional tariffs on China and 25% on Canada and Mexico," the report claims.

The document also explores Trump's extensive economic plan, potentially affecting global markets profoundly. His objectives include cutting corporate tax rates from 21% to 15% for US manufacturers, imposing tariffs up to 60% on Chinese goods, and levying 10-20% tariffs on other imports.

These initiatives are aimed at boosting domestic manufacturing but may induce inflationary pressures and elevate interest rates. Additionally, Trump's immigration strategies, including the mass deportation of illegal immigrants, could disrupt US labor supplies. In foreign policy, Trump intends to reduce aid to Ukraine, limit NATO's role, and enhance support for Israel and Taiwan.

The report also emphasizes Trump's attempts to increase control over the Federal Reserve, possibly resulting in short-term market instability. A robust US dollar, driven by these policies, is already noticeable, with the dollar representing 49% of global payments as of August 2024—the highest in 12 years. While Trump's policies might curtail global growth and elevate economic uncertainty, the report notes that India could benefit as a dependable export alternative amidst evolving trade trends. (ANI)

(With inputs from agencies.)