Trump’s 25% tariff on India is geopolitical chess in name of trade, say experts

The United States has announced a 25 % tariff for Indian exports, which is effective as of August 7, as part of a wider trade procedure that affects approximately 70 countries. This executive, led by President Trump, aims to address commercial imbalances and pressure countries that are not in line with American economic and security interests. Among the affected people, India faces what CA nitin kaushik describes as “a sharp shift towards protectionism.” Such measures can hinder India’s commercial relations with the United States

SBI research indicated that although these definitions are scheduled to affect Indian exports, the American economy may face more severe consequences, and the decision is classified as a “bad work decision.” The report highlights potential results such as decrease in gross domestic product, increased inflation, and the weakness of the dollar. The new definitions are expected to exacerbate inflationary pressure in the United States, which may remain higher than 2 % until 2026.

The main Indian industries, including textiles, gemstones, jewelry, medicines, car components, and electrical machines, will feel the burden of these definitions. Kaushik also notes, “It is a thunderbolt for Indian exporters who are highly dependent on the American market.” These sectors are expected to be re -categorized by pricing, demand and exposure to foreign business currency quickly, because they “are now walking on a tight rope.”

In response to definitions, the financial burden on American families is expected to be important. The price increase may cost an average family about $ 2,20000 in the short term. While low -income families may witness losses of about $ 1300, the owners of the highest successful observers may face up to $ 5,000, although their total financial stability may be less affected. This financial breed can lead to transformations in consumer behavior, which affects different sectors differently.

The investor has warned Sriffastava from the long -term economic risks of India, while emphasizing the need for strong partnerships with global blocs. He said that relying on local capabilities, as some suggested, is unrealistic. Sriffastava criticized India’s efforts under initiatives such as manufacture in India and affirmed the necessity of American technology for the upcoming technological revolution in India.

The effect on Indian rupee can also be great. Customs tariff shocks may disrupt the import balance in India and lead to an increase in demand for the dollar. This may lead to a more expensive hedge for exporters and may require RBI intervention to stabilize the rupee. Kaushik insists that “government policy must go up to protect and promote Indian exporters.”

Historically, Trump’s definitions, such as those on global minerals in 2018-19, have led to a 9 % decrease in steel exports in India. Kaushik notes that this time “is broader and more political”, which is likely to give up industries unless commercial relations are re -negotiated quickly. Countries such as Mexico, Vietnam and Bangladesh may benefit by obtaining a greater share of American exports, as the competitive edge in India is threatened with a low -cost manufacturing center.

For stock investors, Kaushik describes the scenario as “a juvenile chess chess in the commercial economy”, indicating that “the ability to adapt will be a new alpha.” It is recommended to monitor elegant companies with dependence on large American revenues and increase exposure to local consumption topics. This approach aims to move in cases of uncertainty amid these important commercial changes. Moreover, investors should monitor macro indicators such as InR prices, gold and raw oil to better understand the sophisticated economic scene.

The broader effects of these definitions go beyond immediate economic effects, which may change the dynamics of global trade. Since the countries adapt to these new facts, the geopolitical scene may turn, which affects future international relations and economic policies.