Independent Analyst Anand Tandon anticipates that India is unlikely to receive substantial tariff relief from the United States, suggesting that tariffs might stabilize between 15% and 20%. He points out that the trade agreement between the U.S. and the U.K. is unique, and other nations might still be subject to existing tariffs.
Tandon identifies the textile industry as a sector with the potential to benefit, contingent on competitor tariffs and U.S. consumer spending. However, he also suggests that overall trade volumes could decrease due to a possible impact on the U.S. GDP. From India's perspective, it appears that the country may have a relatively better negotiating position for most traditional Indian products, but the overall volumes might not be as significant.
These discussions occur amidst ongoing trade negotiations between India and the U.S., where India has set firm limits, particularly concerning the agriculture and dairy sectors. India seeks a complete exemption from the 26% tariffs. The U.S. had imposed an additional 26% reciprocal tariff on Indian products, which was temporarily suspended for 90 days. The U.S. also maintains a 10% baseline tariff.
India's stance involves resisting lowering duties on agricultural products like maize and dairy, which are key demands from the U.S.. This is a sensitive issue for the Indian government, given the dependence of many small farmers on these products and the potential political repercussions of such concessions. India has previously refused to open its agriculture and dairy sectors in free trade agreements with Australia, the UK, and the European Union, signaling its reluctance to make concessions in these areas.
According to Sandeep Tandon, the CEO of Quant Mutual Fund, President Trump's tariff tactics are a calculated move. He believes that Trump creates disruption and then negotiates. While short-term volatility may increase, the second half of 2025 appears promising. Sandeep Tandon also suggests that the aftermath of the tariff decision presents an opportunity for investors in India, particularly in sectors like infrastructure, hospitals, and hotels. He advises focusing on India-centric gains rather than global concerns.
Bilateral trade between the U.S. and India reached $131.84 billion in 2024-25, with India's exports at $86.51 billion and imports at $45.33 billion, resulting in a trade surplus of $41.18 billion. In the April-May period of the current fiscal year, India's merchandise exports to the United States increased by 21.78 percent, reaching $17.25 billion.
