Page 52 - Banking Finance May 2025

ARTICLE

U.S. Tariff Strategy and Global Ripple Effects Boost R&D and design capabilities.

To address its chronic trade deficit (peaking at USD 1.1 trillion in 2023), the U.S. Train the workforce for high-end
imposed new tariffs on imports from 57 countries. On April 2, 2025, rates ranging manufacturing.
from 11% to 50% were applied to key sectors.
3. Chemicals, Iron, and Steel
Country Tariff (%) Key Exports Affected Likely Impact India is gaining market share in
China 34-50 Electronics, steel Retaliation, supply chain specialty chemicals due to China's
shifts regulatory constraints. Similarly,
Vietnam 46 Textiles, electronics Export decline, India gains Indian steel producers are now
more attractive to global buyers.
Cambodia 49 Apparel, footwear Loss of U.S. market share
Indonesia 32 Palm oil, minerals Competitiveness decline
Priorities:
Taiwan 32 Semiconductors Disruptions, geopolitical Scale production with environ-
friction mental compliance.
India 26 Chemicals, EMS, iron Relative advantage
Promote Indian certifications.
EU (avg) 20 Machinery, vehicles Inflationary pressure, FTA
Improve port and logistics
talks
connectivity.
UK 10 Pharma, autos Revival of trade dialogue
Trade Diplomacy and FTA
China's strong countermeasures, including an 84% duty on U.S. goods, signal
growing tensions. However, this global reshuffling opens new pathways for India. Strategy
India's approach to Free Trade
India's Emerging Trade Advantage Agreements (FTAs) has evolved. With 13

India's trade with the U.S. in 2025 reached $90 billion in goods and $385 billion FTAs and 6 Preferential Trade
in services, led by IT and pharmaceuticals-sectors largely untouched by the new Agreements already in force, India is
tariffs. This stability, combined with competitive positioning, enables India to now in discussions with over 50
capture new market share in sectors such as: nations.

1. Textiles and Apparel The UK Reconnects
As global competitors like Vietnam and China face stiff U.S. tariffs, India's
textile sector stands to benefit. With established production centers like The UK, after withdrawing from FTA
Tiruppur and Surat, India can expand rapidly. talks in 2024, re-engaged in 2025.
Rising post-Brexit vulnerabilities and
Strategic Actions: China concerns have pushed the UK
Enhance logistics and production capacity. back to the negotiation table.
Implication: India is now viewed as a
Promote eco-friendly, certified products.
pragmatic and strategic trade partner.
Add value through design and innovation.
Expanding in the Global South
2. Electronics Manufacturing Services (EMS) India is quietly building ties beyond the
India's EMS industry, supported by Production-Linked Incentive (PLI) schemes, West with regions such as:
is gaining global traction. Tariffs on Chinese and Vietnamese electronics West Asia: UAE, Saudi Arabia
(40%+) give India a comparative advantage.
Africa: Kenya, Egypt, South Africa
Focus Areas: Southeast Asia: Indonesia,
Localize supply chains and components. Philippines

BANKING FINANCE | MAY | 2025 | 47