The short-term impact arising from the 50% US tariffs will be manageable for India, according to Trinh Nguyen, senior economist covering emerging Asia at Hong Kong-based investment bank Natixis.
The US government's additional 25% tariff on Indian-origin goods takes effect from Aug 27, pushing total duties on several categories to 50%.
"Macro-economic impact on India may be neutral, but India may pay the cost in the long-term," Nguyen told NDTV Profit.
She added that short-term impact on India is manageable, as the country fundamentally imports more than it exports. The Indian government can offset impact by tax cuts, Nguyen further said.
Exports to the US is only 2% of India's GDP, she pointed out.
According to Nguyen, the road for India is to export more to the US and EU, even if "we are looking at 50% tariffs". "The India-EU FTA is still under negotiation, and India will need to expand more in that market," she added.
"India has to find a way to lower the tariffs, if it wants to grow the 'Make in India' beyond the domestic market," she said.
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