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Industry body PHDCCI on Sunday said that the reciprocal tariffs imposed by US President Donald Trump will impact only 0.1 per cent of the Indian GDP, exuding confidence in price competitiveness and continued government support.
"Given, India's price competitiveness and supportive government policies, we expect GDP to see only a 0.1 per cent impact," said PHDCCI in a statement. Hemant Jain, President of PHDCCI, said that strong domestic manufacturing and continued government handholding through strategic policy measures, including PLI, Make in India, and Atmanirbhar Bharat, among others, will support India's growth resilience. The president of the industry body further stated that India's strong industrial competitiveness will balance the impact of US tariff announcements, and GDP will see only a 0.1 per cent impact in the short term. However, he added, this shortfall will be negated in the medium term as the policy takes full effect. India's "Make in India" initiative is driving significant progress towards becoming self-reliant. The transition to strengthening domestic consumption will easily absorb the tariff impact. India's robust demand augurs well for sectors such as electronics, renewable energy, and pharmaceuticals, among others, said Jain. "Ease of doing business and production-linked incentive (PLI) schemes have strengthened domestic supply chains and made India more attractive for investments, boosting manufacturing output and competitiveness," said Hemant Jain. "We expect sectors including precious/ semi-precious stones, textiles/apparel, marine products, vehicles, and parts and accessories thereof, articles of iron or steel and chemical products are expected to see a moderately negative to negative impact," he added. According to Jain, the pharmaceutical and petroleum products sectors are expected to see a positive impact. "The 90-day pause announcement is positive news for Indian exporters. However, we need to be cautious because this is a temporary move," said Jain. India is a major consumer market with diversified supply and value chains. Its emerging trade partners include the Middle East, South Africa, Latin America, and Asian nations. The president of the PHDCCI said the demand for Indian products has increased in recent years due to their price competitiveness and improved quality. "Going ahead, given India's sustained economic development and strategic importance, we expect continuing collaboration with the US through a well-negotiated bilateral trade/ free trade agreement," he added. (ANI)
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