trade-and-tariffs

    Trade and tariffs

    Recent tariff developments and their impact on key industries

    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

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    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

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    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

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    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

    Webinar on U.S. reciprocal tariff - Beyond WTO rule-based trade

     

    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.

    Speakers:

    • Himanshu Tewari, Partner (Trade and Customs), KPMG in India
    • Vivek Johri (Ex-CBIC Chairman), Senior Advisor, KPMG in India

    Driving growth with trade and tariff trends

    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.

    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.

    Watch previously aired webcasts

    KPMG Global

    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

    Exploring Traceability in Today’s Global Landscape — 06 May 2025
    Register

    Navigating Trade Turbulence and Tariffs — 01 May 2025
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    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



    Our insights

    U.S. tariffs: What does this mean for India’s logistics sector?

    India needs to move smarter, faster, and stay strategically aligned to play a bigger role in the next wave of global trade

    Tariffs, trade and tipping points: What are some risks and opportunities for India?

    India’s position in global trade is rising but staying ahead will require sharp strategy and stronger alignment with global shifts

    Trump 2.0 and the US-India Partnership: A New Chapter in Strategic Diplomacy

    President Trump’s imperatives will likely reshape both US international and domestic markets, with a trickle-down effect on the global economy

    TradeTech: How are emerging tech developments impacting global trade dynamics?

    Trade landscape continues to embrace digitalisation with an increased need for governance, robust cybersecurity and equitable access to technologies

    Five steps to navigate global risks and trade policy restrictions

    For companies in India to make the most of the projected trade flow, developing holistic approaches to geopolitical risk management will be key

    FPIs enters New Phase - Era of higher tax outgo begins

    Overall prospects for investing in India's capital markets remain positive by strong economic fundamentals and a more streamlined tax environment

    How is Budget 2025 set to accelerate India’s trade growth

    India's ability to maintain a competitive edge in global trade will depend on its investment in emerging technologies

    Budget 2025: The big thrust towards manufacturing and supply chain ecosystem

    Budget 2025 sets the direction for India’s manufacturing expansion, which is expected to have a multiplier effect on the economy

    Global insights

    Unpacking tariffs: Staying ahead in a changing world

    Stay up to date on the latest developments with insights from KPMG member firms around the world.

    Import tariffs – What’s the impact on your financial reporting?

    Understanding new import tariffs and the related uncertainty

    Customs Valuation Strategies to Manage Tariff Disruption

    Explore strategies to assist your business in mitigating the financial implications of tariffs on imported products

    Trade and tariff insights

    Navigating the future of trade and tariffs - Stay informed with KPMG

    Breaking up is hard to do: Tariffs & trade wars

    The outlook for economic growth is cooling

    The Tariff Landscape Under the New Trump Administration

    Learn how to manage the risks and challenges of a complex and evolving tariff landscape

    Trade & Customs Insights

    News and insights on tariffs, import and export laws and regulations, global supply chain, and trade processes and controls

    Insights and resources from across the KPMG global network

    Tariff modeler

    Analyze your trade impact with real-time insights.

    KPMG Australia

    KPMG insights into the global tariff war, the geopolitical drivers and implications, and what the uncertainty means for Australian businesses

    KPMG Canada

    Trade and tariff insights and resources to help mitigate impact of trade disruptions

    KPMG Germany

    Measures taken by the new US administration and the consequences for the German economy

    KPMG UK

    Expert analysis on the potential impact of tariffs on UK businesses

    KPMG US

    Navigating the future of trade and tariffs

    KPMG Vietnam

    The tariff landscape under the new US administration


    How can KPMG in India help

    Supply Chain Realignment

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

    Trade and Customs service

    An interplay of business, regulatory and compliance aspects

    Corporate and International Tax

    Mobility forms the backbone of a country's growth

    Indirect Tax

    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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