Who pays and gains Trump tariffs India

US tariffs on Indian goods

Who Pays?

1. Indian Exporters & Industries

• High-impact sectors: Industries like textiles, gems & jewelry, apparel, leather, footwear, and seafood face some of the steepest costs. Concerned exporters are progressively unable to price competitively many have even frozen production for U.S. orders.

• The gem and jewelry sector worth ~$10 billion to the U.S., with 30% of output headed there is especially accessible . At SEEPZ in Mumbai, 50,000 workers risk job loss.
• Seafood, especially shrimp (which sees ~40% of its exports going to the U.S.), has been likened to a “doomsday” scenario by exporters due to steep tariffs.
• Auto components, machinery, and electronics are also under stress , though their export volumes are lower relative to other sectors.

• 2. Indian Economy

  • Multiple appraisal suggest the GDP hit could range from 0.1% to 0.8%—less severe in the short term, but not trivial:

    • Goldman Sachs: 0.1–0.6 percentage points

    • Morgan Stanley / Jefferies: up to 0.8 percentage points if the policy persists beyond ~20 days
    • PHDCCI and Chief Economist of Infomerics suggest only modest short-term impacts (~0.1–0.2 pp), citing flexibility from domestic manufacturing and demand.
    • The rupee has weakened, increasing import costs (especially for oil) and fueling inflation.
    • Financial markets have seen negative attitude, with foreign investors pulling capital and leading to short-term dryness
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    • Who Gains—or Could Gain?

      1. U.S. Consumers and Manufacturers

      • Some domestic U.S. firms—particularly in manufacturing and technology sectors—may gain from reduced competition due to rising Indian export prices.

      • 2. Indian Domestic-Focused Industries

        • Indian sectors more oriented toward the domestic market or allied with self-reliance efforts (like defense infrastructure, agriculture, and certain IMFL brands) may benefit, as investment and demand shift inward. Consequently, select stocks in these sectors have shown increased interest.

        • 3. Supply Chain Diversion

          • As U.S. tariffs make goods from China and other affected nations more expensive, Indian companies in sectors like electronics, automotive parts, chemicals, and pharmaceuticals may find new opportunities to fill gaps.

          • However, this potential gain is conditional on India enhancing competitiveness and supply reliability.

          • Final Thoughts

            • Cost burden falls initially on Indian exporters and, secondarily, on the broader economy through GDP drag, inflation, and rupee depreciation.

            • Potential winners aren’t guaranteed—domestic-focused sectors may benefit, and strategic supply chain shifts could offer new export avenues, but these require fast adaptation and trade diversification.

            • Going forward, negotiation outcomes and possible bilateral trade deals will be critical in determining whether the losses can be averted or mitigated.