How can international tariffs imposed by major economies influence India’s long-term trade strategies?

International tariffs imposed by major economies like the U.S. can significantly impact India’s trade environment. Such tariffs can affect the competitiveness of Indian exports, disrupt global supply chains, and alter market access. In response, India may need to adjust its long-term trade strategies to protect its economic interests and ensure steady growth.

• Market Diversification: India may focus on diversifying its export markets to reduce dependence on any one country, especially those imposing high tariffs.
• Strengthening Regional Trade: India could enhance trade ties with neighboring countries and regional blocs like ASEAN, BIMSTEC, and Africa to tap into new opportunities.
• Negotiating Trade Agreements: India may actively pursue bilateral and multilateral free trade agreements (FTAs) to secure preferential access and counterbalance tariff barriers.
• Boosting Domestic Competitiveness: To withstand external shocks, India might invest in improving the quality, productivity, and technology of its export sectors.
• Supporting Affected Sectors: Targeted support such as subsidies, tax incentives, or skill development programs may be provided to industries hit by international tariffs.
• Promoting Value-Added Exports: India could shift focus from raw materials to value-added products, making its exports less vulnerable to tariff hikes.
• Engaging in Global Forums: India may use platforms like WTO to raise concerns about unfair tariffs and advocate for a rules-based global trading system.
• Enhancing Supply Chain Resilience: India might develop alternative supply chains and reduce reliance on countries with volatile trade policies.