India Navigates US-China Tariff Thaw: Challenges and Opportunities Ahead

The US and China's pause on tariff hikes creates challenges and opportunities for India's exporters. With tariffs reduced, competition intensifies in key markets. India aims to leverage this shift, emphasizing trade deals with the US and capitalizing on sectors like pharmaceuticals and IT-enabled services.

The US and China's decision to halt tariff hikes for 90 days is a development that could reshape global trade dynamics. The move, aimed at resolving trade disputes, presents both challenges and opportunities for India, according to insights from Federation of Indian Export Organisations (FIEO) President, SC Ralhan.

Ralhan indicates that while the tariff cuts may boost US-China trade in high-value sectors such as electronics and machinery, enhancing competition in markets where India recently gained ground, it also opens avenues for India to strengthen exports in insulated sectors like pharmaceuticals and IT-enabled services. India must seize this opportunity to secure preferential trade deals with the US, highlighting its potential as a reliable alternative supply source.

Experts like GTRI Founder Ajay Srivastava warn of the shrinking tariff gap favoring India, emphasizing the need for strategic trade agreements to maintain India's competitive edge. As tariff dynamics evolve, India's challenge lies in balancing trade policy with enhancing production efficiency and regulatory predictability to fortify its position in global trade.

(With inputs from agencies.)