India is expected to face a relatively muted impact from the ongoing US-China tariff battle, as the country's economy remains comparatively localised, according to analysts.
Maneesh Dangi, founder of Macro Mosaic Investing, said that both the US and China are large, independent economies, with less interdependence compared to East Asian nations. While the US is actively targeting China with tariffs to assert its hegemony, the overall impact on India will be minimal.
India's low export-to-GDP ratio, particularly when compared to East Asia, means that the country is somewhat insulated from the direct consequences of these tariffs, he said. In fact, the tariff impact on oil, for instance, is unlikely to even account for half a percentage point of US' GDP.
The global economy as a whole will suffer from Trump's tariffs, but China and India will be less affected in comparison, Dangi said. While countries will lose, those like India and China, will lose less due to their relatively low trade exposure to the US, he said.
The realpolitik behind Trump's tariff policies seems focused on strengthening US hegemony, rather than directly benefiting any particular nation, according to him.
Prateek Agrawal, managing director and chief executive officer of Motilal Oswal Asset Management, echoed these sentiments. While tariffs could lead to increased prices in the US and a reduction in overall demand, India can only truly benefit if it gains significant market share in the US, he said.
The US is attempting to regain lost manufacturing strength, but its reliance on imported labour and goods presents an opportunity for other countries, including India, Agrawal said.
While the global uncertainty due to tariffs could cause some investors to seek safer assets, India's focus on its 'Make in India' initiative and diversification would likely create opportunities for growth, he said.
Challenges like potential private sector slowdowns exist, but India's diverse economy may still thrive in this volatile global environment, Agrawal said.
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