Will India and the US Reach a Negotiated Settlement on Tariffs?
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Synopsis
As hopes rise for a negotiated settlement on tariffs between India and the US, corporate leaders express optimism about the future of trade relations. With the potential for lower tariff rates and signs of demand recovery, the sentiment in the domestic market remains positive.
Key Takeaways
- Optimism for negotiated tariff settlement
- Potential lower tariff rates
- Concerns about asset quality for exporters
- Positive sentiment in domestic markets
- Government may introduce supportive measures
New Delhi, Aug 13 (NationPress) Corporates in India are expressing optimism that a negotiated resolution regarding tariffs between India and the US is on the horizon, according to a report released on Wednesday.
Industry leaders, affected by the US administration's decisions, anticipate that the final tariff rates on US imports from India will ultimately settle at a more favorable level. This sentiment was shared during an event organized by Emkay, a prominent Financial Services provider.
Corporate stakeholders believe that the current 21-day off-ramp window will facilitate a negotiated settlement between India and the US. Companies most exposed to the US market are contemplating contingency plans that may involve relocating production to other regions, although such transitions will require time to implement.
The speakers at the event reiterated the long-term growth narrative for India.
Dixon Technologies expressed its aspirations to enhance its position in the value chain and maintain its growth trajectory.
Adil Zainulbhai, Chairman of the Capacity Building Commission, shared insights on how CBC’s initiatives are improving efficiency in both government and public sector enterprises.
However, they noted potential challenges regarding asset quality, especially for textile and MSME exporters, if tariffs remain as high as 50 percent.
Industry leaders are hopeful that the government will introduce targeted measures, possibly including a credit guarantee scheme, to mitigate the negative impact, as indicated by the speakers.
Despite trade complexities, there is a prevailing positive sentiment regarding India’s domestic market, they emphasized.
Management teams across various sectors, from consumer staples to discretionary categories, are observing early signs of demand recovery and are preparing for a vibrant festive season and a promising second half of FY26, as noted in the report.
Lenders are supporting this optimistic outlook, predicting strong growth in retail loans later in FY26, even as corporate lending encounters stiff competition from the bond market, as highlighted by the speakers.
Meanwhile, the government continues to engage in discussions regarding the India-US Bilateral Trade Agreement (BTA) with Washington, aimed at enhancing trade and investment through tariff stability and long-term trade predictability.
Point of View
The ongoing discussions between India and the US regarding tariffs are crucial for maintaining stable trade relations. While optimism prevails among corporates, it is essential to consider the potential challenges and impacts on various sectors. The government’s role in facilitating a resolution will be key to ensuring economic stability and growth.
NationPress
20/08/2025
Frequently Asked Questions
What is the current status of India-US tariff negotiations?
Corporates in India are hopeful that a negotiated settlement will occur soon, with expectations for lower tariff rates.
How could high tariffs impact Indian businesses?
High tariffs, particularly at 50 percent, could strain asset quality for textile and MSME exporters, prompting the need for government intervention.
What measures might the government take to support affected industries?
The government may introduce targeted measures, including a potential credit guarantee scheme, to cushion the impact of high tariffs.
Is there a positive sentiment in the Indian domestic market?
Yes, management teams across various sectors report early signs of demand recovery, indicating a positive outlook for the domestic market.
What are the long-term prospects for India’s economy?
Industry leaders emphasize a long-term growth narrative for India, bolstered by government initiatives and a recovering domestic demand.
