Tariffs: Opportunities, challenges
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On April 2, in a symbolic and dramatic White House Rose Garden address, US President Donald Trump declared the day as “Liberation Day,” calling it “one of the most important days in American history” and “our declaration of economic independence.” This marked the formal announcement of sweeping reciprocal tariffs by the United States, intended to rectify trade practices contributing to its growing goods trade deficit — now exceeding $1.2 trillion.
However, a notable twist arrived on April 11: a 90-day pause on the new tariff implementation, except for a baseline 10 per cent, signalling room for dialogue. According to US Treasury Secretary Scott Bessent, the tariff move was a negotiation lever — aimed primarily at major Asian trading partners including Japan, Vietnam, South Korea and India.
This creates a valuable window for India to shape an interim trade deal on mutually beneficial terms, leveraging its large domestic market and growing global influence. With the Terms of Reference for a Bilateral Trade Agreement (BTA) already signed, structured negotiations could begin delivering outcomes in the next six months.
Multi-Pronged approach
Import rationalisation: Prioritise essential and capital goods; discourage luxury or non strategic imports through calibrated tariffs.
Export ecosystem strengthening: Invest in logistics, streamline compliance, and empower MSME exporters.
Trade intelligence: Further strengthen real-time AI-powered analytics to anticipate evolving tariff and NTB risks.
Credit enablement: Encourage export-linked financing in foreign currency also through banks and NBFCs.
Diversification: Expand focus to ASEAN, Africa, and Latin America while fast-tracking FTAs with EU, UK, and Canada.
The RBI’s recent 25 bps repo rate cut and downward GDP forecast revision by 20 bps reflect a cautious macro stance. But India’s true strength lies in agility — responding not with retaliation, but with strategic negotiation and internal capability building.
The global trade order is not collapsing — it’s resetting. For India, this is a moment not of disruption, but of opportunity to lead responsibly, diversify smartly, and trade strategically.
The writer is a Management & HR Consultant/Director – NBFC/Retired Banker
Published on April 17, 2025
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