(MENAFN- KNN India)
New Delhi, Jan 14 (KNN) A recent report by Boston Consulting Group (BCG) reveals that the incoming Trump administration's proposed tariff increases could impose an additional duty burden of USD 14.6 billion on Indian exports to the United States.
The analysis suggests that while significant, this impact would be considerably less severe than the burden faced by other major trading partners.
The proposed tariff structure, set to be implemented after Trump takes office on January 20, includes a 60 per cent import duty on Chinese goods, 25 per cent on Mexican and Canadian imports, and 20 per cent on products from the rest of the world.
Based on India's 2023 exports to the US, which totalled USD 84 billion, the pharmaceutical and automotive parts sectors would be most severely affected, with each industry facing an estimated USD 3 billion in additional costs.
Currently, India benefits from a relatively low effective tariff rate of 3 per cent in the US market.
By comparison, the report indicates that China would face the highest additional duty burden at USD 201.7 billion, followed by Mexico at USD 118.8 billion, Canada at USD 104.7 billion, and the European Union at USD 102.6 billion.
Despite these challenges, BCG projects that India is well-positioned to emerge as a leading 'China+1' global manufacturing hub, supported by its substantial domestic market.
The report highlights several factors that are expected to drive India's trade growth, including enhanced trade connectivity with Europe and West Asia, strong ties with ASEAN countries backed by existing free trade agreements, and potential expansion in sectors such as agriculture, pharmaceuticals, mining, and manufacturing.
Additionally, the expansion of BRICS+ to include the Gulf Cooperation Council and strengthened trade relations with the UAE through expanded trade agreements are expected to create new opportunities.
BCG forecasts that India's total trade and GDP will grow at an annual rate of 6.4 per cent between 2023 and 2033, driven by the 'China+1' strategy and increasing domestic market demand.
US-India trade relations are projected to strengthen significantly, with exports to the US expected to more than double, reaching USD 116 billion by 2033, primarily due to deeper cooperation in defence and technology sectors.
While India-China trade growth may moderate due to trade deficits, border tensions, and investment concerns, India's trade with other partners is expected to show robust growth, with projections indicating an 80 per cent increase in trade with the EU, ASEAN, and Africa, a tripling of trade with Australia and South Korea, and nearly doubled trade with Japan and the Mercosur bloc.
(KNN Bureau)
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