The recent U.S. tariffs have created significant uncertainties for international trade dynamics, presenting both challenges and opportunities for Indian businesses, particularly those engaged in the U.S. market. From a business perspective, these developments necessitate proactive strategies to mitigate risks in both short and long terms and capitalise on emerging opportunities. Indian companies need to adapt by diversifying export markets, renegotiating trade agreements and enhancing supply chain resilience to navigate these complexities.

      Implementing immediate and forward-looking strategies is critical now to minimising risks, maintaining stability and driving sustainable growth. Explore the intricacies of trade and tariffs to understand their impact on India, develop strategies for navigating complex bilateral regulations and uncover opportunities for expanding cross-border operations.

      India and the U.S. trade dynamics

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      Leading export partner

      The U.S. remains leading export partner followed by the UAE, the Netherlands, China, Singapore, and Saudi Arabia

      percent

      Increased export share

      Share of exports increased from 17.7 per cent in FY24 to 19.1 per cent between April 2024 to January 2025

      vaccines

      Top export commodities

      Electrical equipment and machinery, followed by gems and jewellery and pharmaceutical products, among others

      all_inclusive

      Trade deficit

      U.S. trade deficit with India stands at USD 50 billion, placing India at an advantage as compared to other nations, namely China and Vietnam

      precision_manufacturing

      Strong diplomatic relations

      Provides India with a strategic advantage in the ongoing supply chain shifts

      Reciprocal tariffs’ impact on India: Opportunities

      Comparative tariff rates

      Despite the substantial 26 per cent reciprocal tariff on India, it is relatively lower compared to its Asian competitors, including Vietnam (46 per cent), Thailand (36 per cent), China (54 per cent & additional penal tariffs) and Taiwan (32 per cent)

      Sector Impact

      Gems and jewellery along with chemicals have been negatively impacted, whereas pharmaceuticals and semiconductors stand to benefit from tariff exemptions, creating avenues for growth and investment

      Competitive edge

      Sectors such as electronics, smartphones, textiles and agriculture can leverage India's relatively lower tariffs to gain a competitive edge over countries

      Strategic opportunities

      Strengthening global trade partnerships beyond the U.S., increasing export quality and value and driving the growth of global capability centers (GCCs)

      The recent implementation of the U.S. tariffs disrupted global markets, compelling key trading partners to address new economic challenges

      India is looking to expedite the bilateral trade agreement with the U.S. to address the challenges and make it mutually beneficial for both the economies. However, the outcome will also be influenced by how other countries retaliate or negotiate with the US on tariffs.

      While these latest developments pose certain challenges, they also present strategic opportunities for India.

      Liberation day: Its implications on India

      Liberation day: Its implications on India

      Discover how the U.S. tariff policy impacts India through digital solutions, supply chain resilience, trade compliance, alliances, and FTAs


      Hear from the experts

      The webinar is focused on outlining India's business perspective and the comparative advantage that India may gain versus some of the other emerging economies.

      Watch Himanshu Tewari join industry experts to discuss the implications of U.S trade and tariff policy on Indian exporters. The conversation explores whether this shift indicates economic nationalism or a reordering of global trade dynamics. 

      Driving growth with trade and tariff trends

      Neeraj Bansal

      Partner and Head India Global

      KPMG in India

      Amidst trade uncertainties and geopolitical shifts, India stands at a strategic crossroads. From managing cheap import inflows and dumping risks to meeting rules of origin norms, the challenges are real. But there are also clear opportunities. Fast-tracking trade agreements, deepening manufacturing integration and diversifying exports can help India strengthen its global position. To move ahead, India needs a focused strategy and stronger global partnerships.

      Navin Agrawal

      Global Lead Partner – Chairman Accounts, Head – India UK Corridor

      KPMG in India

      The recently concluded India - UK Free Trade Agreement is a historic and strategic milestone in bilateral economic relations - ambitious in vision and comprehensive in impact. With 99% of Indian exports set to enter the UK duty-free, and major tariff reductions including on automobiles, it unlocks significant growth across labour-intensive sectors like textiles, marine, and auto components, while creating new opportunities in services such as IT, finance, and education.

      The three-year social security exemption and improved mobility for professionals mark a breakthrough for Indian talent. Projected to boost bilateral trade by £25.5 billion, this partnership reflects a shared commitment to inclusive, innovation-led growth and deeper global alignment.

      Abhishek Jain

      Partner and National Head, Indirect Tax

      KPMG in India

      The India-UK FTA is a strong push for business growth. This mostly would make it easier for Indian companies to access the UK market, attract investments, and strengthen trade ties. The long-term impact is expected to be seen in increased opportunities, jobs, and deeper collaboration across industries.

      Nilachal Mishra

      Partner and Head of Government & Public Services (G&PS)

      KPMG in India

      Global tariffs create a shift in tradeflows, with countries looking for alternative suppliers, which may impact the availablity and pricing of these oils globally. As a result, India could face higher prices for palm, sunflower, and soybean oils, which are key imports. In response, India should focus on enhancing domestic production through targeted policies, such as those included in the National Mission on Edible Oils - Oilseeds.

      Watch previously aired webcasts

      KPMG Global

      Navigating tariffs and transfer pricing in a disruptive environment — 18 June 2025
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      Global Economic Outlook — 05 June, 2025

      Watch the replay | Download the webcast recap

      Beyond borders: Adapting to widespread tariff increases — 23 April 2025

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      Talking tariffs: Key considerations for private companies​ — 26 March 2025
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      Navigating cross-functional tariff complexities​ — 12 February 2025
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      The incoming US administration's proposed measures: Potential impacts of tariffs in the US, Canada, Mexico and beyond — 18 December 2024
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      KPMG US

      The Power of Proactive Tariff Planning: Introducing the KPMG Tariff Modeler — 12 June 2025
      Register

      Exploring Traceability in Today’s Global Landscape — 06 May 2025
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      Navigating Trade Turbulence and Tariffs — 01 May 2025
      Register

      Tax Policy Trifecta: The First 100 Days of the Trump Administration — 30 April 2025
      Register

      Path to Tariff Resilience: Harnessing Duty Drawback Savings in the Current Trade Environment — 24 April 2025
      Register

      Navigating the New 232 Steel and Aluminum Tariff Requirements — 28 March 2025
      Register

      KPMG Canada

      Tariff disruption: Responding with resilience — 9 April 2025
      Register

      KPMG Germany

      Neuausrichtung der USA, Chancen und Herausforderungen — 29 April 2025
      Register

      KPMG UK

      Navigating the shifting sands: Understanding the impact of the new US trade tariffs on UK businesses — 24 April 2025
      Register



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      How can KPMG in India help

      Our Supply Chain Realignment solution is a specialised value-driven offering to help clients build greater resilience into their global supply chains

      An interplay of business, regulatory and compliance aspects

      Mobility forms the backbone of a country's growth

      Mobility forms the backbone of a country's growth


      Key Contacts

      Neeraj Bansal

      Partner and Head India Global

      KPMG in India

      naveen-aggarwal
      Naveen Aggarwal

      Partner, Office Managing Partner – Delhi NCR, U.S.-India

      KPMG in India

      Abhishek Jain

      Partner and National Head, Indirect Tax

      KPMG in India

      Himanshu Tewari

      Partner, Trade and Customs

      KPMG in India

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