The domestic brokerage house Motilal Oswal believes that the US tariff impact will remain minimal on India. India’s exports in the six most vulnerable sectors amount to only 1.1% of India’s GDP. “Overall, we believe that the impact of reciprocal tariffs (assuming full product-level reciprocity) on India will be limited on a national basis,” said Motilal Oswal. Key international brokerages like HSBC also corroborated the view.
Motilal Oswal on Trump Tariff impact
India may face a trade loss of exports to the US of around $3.6 billion, which is only 0.1% of India’s GDP. This is because “with a tariff differential of 9% and assuming that the elasticity of India’s exports to the US with respect to tariffs is -0.5 (implying a 1% rise in the tariff rate would reduce India’s exports to the US by 0.5%),” said Motilal Oswal.
ALSO READLIVE: Indian stock market Trumps tariff impact; Pharma surges, Nifty above 23,200
They say that markets are a reflection of a country’s economy. Indian equity markets are trading on a flat to lower note. The Nifty 50 and Sensex were trading 0.3% lower.
HSBC on Trump Tariff impact
International brokerage house, HSBC said that as for world trade, its current projection of a marked slowdown in world export volume growth from 2.9% in 2024 to 1.3% in 2025-26 reflects slower US import demand and the negative impact of uncertainty on confidence and global investment spending.
The US is one of the largest trading partners of India, with bilateral trade of $124 billion in CY24. Indian exports to the US reached $81 billion, and imports from India to the US were $44 billion. This resulted in a trade surplus of $37 billion for India in CY24. The US is India’s largest export destination, with its share reaching 18% in CY24 from 13% in CY14 and 6% in CY06. Notably, India’s imports from the US (as a % of total imports) have remained stable at 6% in CY24 as against 5% in CY14.
ALSO READ‘Picture Abhi Baki Hai’ says Nilesh Shah of Kotak Mahindra AMC on impact of Trump Tariff These sectors have no additional tariff
Just to remind our readers, in a fact sheet, The White House said that Some goods will not be subject to the Reciprocal Tariff.
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