Indian Exporters See Relative Advantage Amidst US Tariff Hikes

Trump's ‘explosive’ tariffs are now in effect, including 104 per cent on China, the world's biggest exporter. Also, on the list are 60 of the "worst offending" countries - who will face tariffs ranging from 11 per cent to 50 per cent.

President Trump, in a historic measure to counter higher duties on American products imposed globally, announced reciprocal tariffs. Meanwhile, a broader negotiation push is taking shape new US tariffs across 185 countries go into effect. In the short run, this will adversely affect the US economy first and foremost, it is a self-goal as footballers would say!

US has applied tariffs on other countries also, and India would be competing with producers from those countries, the overall effect will be smaller than if the tariffs had been applied only on India. However, the ongoing changes in the US trade policy will not impact domestic growth so much because India is not an export-dependent economy.

"We have to be patient, trade agreements do not happen overnight. Demand in the US could be a little challenging, however US may reduce internal taxation to raise disposable income leading to increased consumption," says Dr. Mohan Krishna Balivada, founder of Cheers group and World’s first alco-bev marketing Doctorate.

Cheers Group’s Kadamba Indian single-malt whisky production is built on a complete and continually upgrading industrial system, sustained investment in R&D, and a strong focus on innovation. Cheers Group, valued at Rs 800 crore, boasts over 120 brands, including Kadamba, Three Monkeys Single-Malt, and Labrodog Premium Scotch, reportedly plans to absorb, adjust, and rework the trading dynamic in a way that US's reciprocal tariffs will have a minimal impact.

"Implementing reciprocal tariffs is not easy, the barriers may be circumvented by goods entering through third country with lower tariffs for entry into the US as it happened before," says Ashwin Balivada CEO of Cheers Group.

"India needs to understand that world has become much more protectionist with the US tariffs, so good to look at east towards Asia and Japan, southwest to Africa, northwest to Europe," opines Ashwin.

India has emerged a "winner" in the recent US tariff hikes, as its exporters are better positioned to absorb the impact compared to competitor countries that are facing higher import duties in America. While the US has imposed an additional 26 per cent import duty on India, its competitor Vietnam is facing 46 per cent tariff, Bangladesh 37 per cent, Indonesia 32 per cent, and Thailand 36 per cent.