Can Trump's sweeping global tariffs spark a manufacturing boom in India?
Donald Trump's sweeping tariffs have shaken global trade, but disruption often creates opportunity.
Starting 9 April, Indian goods will face tariffs of up to 27% (Trump's tariff chart lists India's rate as 26%, but the official order says 27% - a discrepancy seen for other nations too). Before the tariff hike, US rates across trading partners averaged 3.3%, among the lowest globally, compared to India's 17%, according to the White House.
However, with the US imposing even higher tariffs on China (54%), Vietnam (46%), Thailand (36%) and Bangladesh (37%), India "presents an opportunity" in textiles, electronics and machinery, according to the Delhi-based think tank Global Trade Research Initiative (GTRI).
High tariffs on Chinese and Bangladeshi exports open space for Indian textile manufacturers to expand in the US market. While Taiwan leads in semiconductors, India can tap into packaging, testing and lower-end chip manufacturing - if it strengthens infrastructure and policy support. Even a partial supply chain shift from Taiwan, driven by 32% tariffs, could work in India's favour.
Trump tariffs a 'major blow to world economy'
Machinery, automobiles and toys - sectors led by China and Thailand - are ripe for tariff-driven relocation. India can capitalise by attracting investment, scaling production and boosting exports to the US, according to a note by GTRI.
But will India be able to seize the moment?
High tariffs have increased costs for companies dependent on global value chains, hobbling India's ability to compete in international markets. Despite growing exports - primarily driven by services - India runs a significant trade deficit. India's share of global exports is a mere 1.5%. Trump has repeatedly branded India a "tariff king" and a "big abuser" of trade ties. With his new tariffs, the fear is that Indian exports will be less competitive.
"Overall, the US's protectionist tariff regime could act as a catalyst for India to gain from global supply chain realignments," says Ajay Srivastava of GTRI.
"However, to fully leverage these opportunities, India must enhance its ease of doing business, invest in logistics and infrastructure and maintain policy stability. If these conditions are met, India is well-positioned to become a key global manufacturing and export hub in the coming years."
That's easier said than done. Biswajit Dhar, a trade expert from the Delhi-based Council for Social Development think tank, points out that countries like Malaysia and Indonesia are possibly better positioned than India.
"We may regain some lost ground in garments now that Bangladesh faces higher tariffs, but the reality is we've treated garments as a sunset sector and failed to invest. Without building capacity, how can we truly benefit from these tariff shifts?" says Mr Dhar.
Since February, India has ramped up efforts to win Trump's favour - pledging $25bn in US energy imports, courting Washington as a top defence supplier and exploring F-35 fighter deals. To ease trade tensions, it scrapped the 6% digital ad tax, cut bourbon whiskey tariffs to 100% from 150% and slashed duties on luxury cars and solar cells. Meanwhile, Elon Musk's Starlink nears final approval. The two countries have launched extensive trade talks to narrow the US's $45bn trade deficit with India.
Yet, India did not escape the tariff war.
"India should be concerned - there was hope that ongoing trade negotiations would shield it from reciprocal tariffs. Facing these tariffs now is a serious setback," says Abhijit Das, former head of the Centre for WTO Studies at the Indian Institute of Foreign Trade.
One upside: pharmaceuticals are exempt from reciprocal tariffs, a relief for India's generic drug makers. India supplies nearly half of all generic medicines in the US, where these lower-cost alternatives account for 90% of prescriptions.
However, exports in key sectors like electronics, engineering goods - automobile parts, industrial machines - and marine products could take a hit. It would be especially troubling for electronics, given the heavy investments through India's flagship "production-linked incentives" (PLI) schemes to boost local manufacturing.
"I'm apprehensive about our exporters' capacity - many are small manufacturers who will struggle to absorb a 27% tariff hike, making them uncompetitive. High logistical costs, rising business expenses and deteriorating trade infrastructure only add to the challenge. We're starting at a major disadvantage," says Mr Dhar.
Many see these tariffs as Trump's bargaining chip in trade negotiations with India. The latest US Trade Representative report underscores Washington's frustration with India's trade policies.
Released on Monday, the report flags India's strict import rules on dairy, pork and fish, requiring non-GMO certification without scientific backing. It also criticises India's sluggish approval process for genetically modified products and price caps on stents and implants.
Intellectual property concerns have landed India on the 'Priority Watch List', for which the report cites weak patent protections and a lack of trade secret laws. The report also frets about data localisation mandates and restrictive satellite policies, straining trade ties further. Washington fears India's regulatory approach is increasingly mirroring China's. If these barriers were removed, US exports could rise by at least $5.3bn annually, according to the White House.
"The timing couldn't be worse - being in the middle of trade negotiations only deepens our disadvantage. This isn't just about market access; it's the whole package," says Mr Dhar. Also, gaining an edge over Vietnam or China won't happen overnight - building opportunities and competitive strength takes time.
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New York Times
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Live Updates: Israel and Iran Trade New Strikes on 9th Day of War
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New York Times
15 minutes ago
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Israel-Iran ConflictLive Updates: Israel and Iran Trade New Strikes on 9th Day of War
President Trump was angry. Earlier this month, Tulsi Gabbard, his director of national intelligence, had posted a three-and-half-minute video to social media describing her visit to Hiroshima, Japan, and outlining the horrors caused by the detonation of a nuclear weapon there 80 years ago. Speaking directly to the camera, Ms. Gabbard warned that the threat of nuclear war remained. 'As we stand here today, closer to the brink of nuclear annihilation than ever before,' she said, 'political elites and warmongers are carelessly fomenting fear and tension between nuclear powers.' Mr. Trump berated Ms. Gabbard for the video, according to two people briefed on the conversation. He said that her discussion of nuclear annihilation would scare people and that officials should not talk about it. Mr. Trump's displeasure with the video laid bare months of his skepticism of Ms. Gabbard and frustrations with her. The president and some administration officials viewed her overseas travel, as the video exemplified, as being as much about self-promotion of her political career as it was about the business of government, multiple officials said, who spoke on the condition of anonymity to discuss internal dynamics of the administration. But the tensions surrounding Ms. Gabbard are now in the open, as Mr. Trump considers mounting a military strike on Iran. Ms. Gabbard, a critic of overseas entanglements, has privately raised concerns of a wider war. And on Friday Mr. Trump said 'she's wrong' when he was asked about her testimony in March that Iran had not decided to build a nuclear weapon. After the video was posted, the president also told Ms. Gabbard that he was disappointed in her, and wished she had used better judgment, according to one of the two people briefed on the conversation. He told Ms. Gabbard that he believed she was using her time working for him to set herself up for higher office. Mr. Trump told Ms. Gabbard that if she wanted to run for president, she should not be in the administration, one of the people briefed on the meeting said. Image Ms. Gabbard and her husband, Abraham Williams, at her swearing-in at the White House in February. Credit... Eric Lee/The New York Times While Ms. Gabbard is a former Democrat, her credentials as a critic of America's long wars in Iraq and Afghanistan and as a skeptic of foreign military interventions appeal to Mr. Trump's base, and her views dovetail with those of some of his other advisers. Her supporters are openly advocating that the president keep her. 'The president needs someone who will give him the right intelligence information, whether he likes it or not,' said Daniel L. Davis, an analyst at the think tank Defense Priorities, which advocates a restrained foreign policy. 'If you put someone else in there, they might only tell him what he wants to hear.' Mr. Davis, a retired Army lieutenant colonel, was Ms. Gabbard's choice for a top intelligence role before criticism from Republicans over his skepticism of Israel's war in Gaza forced her to rescind the appointment. There is no question, officials said, that Ms. Gabbard's standing has been weakened and that she is embattled. But few in the administration want to see her depart. Some say she has people who like her, while others worry about who might replace her. Two officials said that Mr. Trump's anger over the video had faded and that they were back on better terms. Ms. Gabbard continues to brief the president regularly and speaks often to John Ratcliffe, the C.I.A. director, who held Ms. Gabbard's job in the first Trump administration, according to multiple officials. In a statement, the White House press office dismissed any notion she has been sidelined. Steven Cheung, a White House spokesman, said Mr. Trump had 'full confidence' in his national security team. 'D.N.I. Gabbard is an important member of the president's team and her work continues to serve him and this country well,' Mr. Cheung said. Ms. Gabbard was an aggressive supporter of Mr. Trump on the 2024 campaign trail. He and his top advisers valued her input, especially when Mr. Trump was preparing to debate Vice President Kamala Harris — whom Ms. Gabbard had memorably attacked in a Democratic primary debate in 2019. After the election, Mr. Trump quickly decided to nominate her for director of national intelligence. But from the beginning he made clear to associates that he harbored some doubts. Mr. Trump, according to associates, saw her as overly interested in her own success. Mr. Trump drew a contrast between Ms. Gabbard and the other former Democrat he named to his cabinet, Robert F. Kennedy Jr. 'Bobby's a star,' Mr. Trump told one associate. 'Tulsi? Tulsi wants to be a star.' Mr. Trump's implication was that unlike Mr. Kennedy, Ms. Gabbard did not have what it took to succeed in politics. Image Ms. Gabbard with Mr. Trump, Robert F. Kennedy Jr. and Tucker Carlson during a campaign event in Georgia in October. Credit... Kenny Holston/The New York Times And soon after her swearing-in, he began to complain about her effectiveness. At the same time, Mr. Trump — long mistrustful of the intelligence community — questioned whether there needed to be an Office of the Director of National Intelligence at all. A senior intelligence official said Ms. Gabbard had overseen a 25 percent cut in the size of her office. And Ms. Gabbard has repeatedly told people in the White House that she is willing to be the last director of national intelligence, according to an official. The office, Ms. Gabbard said, could be reabsorbed into the C.I.A., or become something akin to the National Security Council, a bare-bones oversight group. At least for a time, the kind of foreign policy restraint Ms. Gabbard favors appeared to gain traction this spring. In White House discussions about Israel and Iran, Ms. Gabbard raised the range of possible consequences of an Israeli strike against Iran, saying it could trigger a wider conflict that brought in the United States. Vice President JD Vance, at times also a skeptic of military intervention, made similar arguments and was among those who supported Mr. Trump's impulse to initially try to negotiate a deal with Iran. As the C.I.A. delivered intelligence reports that Israel intended to strike Iran regardless, Mr. Trump and senior aides became more publicly supportive of the Israeli campaign. Ms. Gabbard did not attend a key meeting at Camp David, where Mr. Ratcliffe presented assessments about Iran's nuclear program. Ms. Gabbard, according to officials, was on Army Reserve duty. Other people with knowledge of the matter have said she was not invited. (Karoline Leavitt, the White House press secretary, said Ms. Gabbard had met daily with Mr. Trump and his team.) Then on Tuesday, Mr. Trump contradicted Ms. Gabbard in public. After the Israeli strikes began, a journalist on Air Force One asked Mr. Trump about Ms. Gabbard's testimony in March that Iran had not decided to make a nuclear bomb. 'I don't care what she said,' Mr. Trump said. 'I think they were very close to having it.' He made similar comments on Friday. Image Mr. Trump, aboard Air Force One this week, contradicted Ms. Gabbard's assessment of Iran's nuclear program. Credit... Kenny Holston/The New York Times An official from Ms. Gabbard's office said her position was not at odds with Mr. Trump's. In her testimony, Ms. Gabbard reported the consensus opinion of the intelligence community: that Iran's supreme leader had not authorized the country to build a nuclear weapon. But Ms. Gabbard had also noted Iran's large stocks of enriched uranium and a shift in tone that was 'likely emboldening nuclear weapons advocates within Iran's decision-making apparatus.' But Mr. Trump's Air Force One remark came off as a rebuke. To a certain extent, some officials said, courting Mr. Trump's displeasure is a hazard of any intelligence job in his administration. Mr. Trump believes the intelligence community undermined him in his first term, and his long-held skepticism that it is part of a disloyal deep state continues. Ms. Gabbard, when briefing Mr. Trump, presents a range of options and assessments. But it is difficult to talk about the findings of spy agencies and not raise Mr. Trump's ire, the official said. Ms. Gabbard's most important job as director of national intelligence is overseeing, and delivering, the president's daily intelligence brief. But the brief is actually produced a few miles from her office at the C.I.A., and many of those working on the document are detailed from the agency. Ms. Gabbard announced internally last month that she would physically move the production of the brief to her headquarters, known as Liberty Crossing. Within the administration, several senior officials saw it as a way to try to enhance her own relevance at a time when Mr. Trump was questioning the relevance of the office. Others said it was an expensive decision that would be logistically difficult to carry out. Ultimately, the White House put the move on pause, according to multiple people briefed on the matter. Ms. Gabbard has influential defenders inside and outside the government. Mr. Vance, seen as the most senior voice for a less hawkish, more restrained foreign policy, issued a long social media post defending the administration's support of Israel's attack on Iran. He added to that a message supporting Ms. Gabbard. He also released a statement calling her a 'patriot.' Her supporters insist that she remains relevant and that, over time, her skepticism of American intervention in Ukraine and caution on military action against Iran will once more prevail. The possible delay of any decision by Mr. Trump to strike Iran represents an opportunity for diplomacy and critics of American military intervention to make the case for restraint, some of Ms. Gabbard's supporters said. Olivia C. Coleman, a spokeswoman for Ms. Gabbard's office, dismissed the reports of dissatisfaction or tensions with the White House as 'lies made up by bored, irrelevant anonymous sources with nothing better to do than sow fake division.' 'The director,' Ms. Coleman said, 'remains focused on her mission: providing accurate and actionable intelligence to the president, cleaning up the deep state and keeping the American people safe, secure and free.'
Yahoo
29 minutes ago
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Hours of talks aimed at de-escalating fighting between Israel and Iran failed to produce a diplomatic breakthrough as the war entered its second week with a fresh round of strikes between the two adversaries. European ministers and Iran's top diplomat met for four hours on Friday in Geneva, as President Donald Trump continued to weigh US military involvement and worries rose over potential strikes on nuclear reactors. European officials expressed hope for future negotiations, and Iranian foreign minister Abbas Araghchi said he was open to further dialogue while emphasising that Tehran had no interest in negotiating with the US while Israel continued attacking. 'Iran is ready to consider diplomacy if aggression ceases and the aggressor is held accountable for its committed crimes,' he told reporters. No date was set for the next round of talks. Israeli prime minister Benjamin Netanyahu said Israel's military operation in Iran would continue 'for as long as it takes' to eliminate what he called the existential threat of Iran's nuclear programme and arsenal of ballistic missiles. Israel's top general echoed the warning, saying the Israeli military was ready 'for a prolonged campaign'. But Mr Netanyahu's goal could be out of reach without US help. Iran's underground Fordo uranium enrichment facility is considered to be out of reach to all but America's 'bunker-buster' bombs. Mr Trump said he would put off deciding whether to join Israel's air campaign against Iran for up to two weeks. The war between Israel and Iran erupted on June 13, with Israeli airstrikes targeting nuclear and military sites, top generals and nuclear scientists. At least 657 people, including 263 civilians, have been killed in Iran and more than 2,000 wounded, according to a Washington-based Iranian human rights group. Iran has retaliated by firing 450 missiles and 1,000 drones at Israel, according to Israeli army estimates. Most have been shot down by Israel's multi-tiered air defences, but at least 24 people in Israel have been killed and hundreds wounded. Israel's defence minister said on Saturday it killed a commander in Iran's paramilitary Revolutionary Guard who financed and armed Hamas in preparation for the October 7 2023 attack on Israel that sparked the 20-month long war in Gaza. Israel said Saeed Izadi was commander of the Palestine Corps for the Iranian Quds Force, an elite arm of the Guard that conducts military and intelligence operations outside Iran, and that he was killed in an apartment in the city of Qom.
