Trump reciprocal tariffs to have impact just 0.1% on GDP: PHDCCI

In one of the first reactions from India Inc to US President Donald Trump’s reciprocal tariffs, industry body PHDCCI expects only a marginal 0.1 per cent impact on GDP. This business chamber said in a press release that this is because of “India’s price competitiveness and supportive government policies.” And even that impact will be negated in the medium term.

Strong domestic manufacturing and continued government handholding by strategic policy measures, including production-linked incentive (PLI) schemes, Make in India, and Atmanirbhar Bharat, will support India’s growth resilience, said Hemant Jain, President, PHDCCI.

India’s robust 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, said Jain. However, in the medium term as the policy takes full effect this shortfall will be negated, he added.

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, said Jain.

Ease of doing business and PLI schemes have strengthened domestic supply chains and made India more attractive for investments, boosting manufacturing output and competitiveness, said Jain.

India is a major consumer market with diversified supply and value chains with emerging trade partners that include the Middle East, South Africa, and Latin America as well as Asian nations. The demand for Indian products has increased in recent years due to price competitiveness and improved quality, he said.

Going ahead, given India’s sustained economic development and strategic importance, we expect continuing collaboration with the US through a well negotiated bilateral trade agreement, Jain added.