Will New US Tariffs Impact India’s Resilience?
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Synopsis
Billionaire investor Mark Mobius asserts that the new tariffs imposed by the US on India won’t significantly hinder the nation due to its robust domestic market. With a strong economy and thriving export sectors, India stands resilient amidst global uncertainties. Discover how India’s economic growth positions it favorably in the face of these challenges.
Key Takeaways
- India's domestic market provides a strong buffer against tariffs.
- Indian software exports are not affected by the new tariffs.
- Pharmaceuticals and electronics are currently exempt.
- India’s GDP growth rate is between 6-7%.
- India is on track to become the third-largest economy globally.
New Delhi, Aug 7 (NationPress) Prominent billionaire investor Mark Mobius stated on Thursday that the forthcoming 50 percent tariffs on India, introduced by US President Donald Trump, will likely have a minimal effect on the nation due to its substantial domestic market, which provides a buffer, unlike China that heavily relies on exports.
In a conversation with IANS, Mobius, who manages the Mobius EM Opportunities Fund focused on emerging markets (EMs), mentioned that India is better positioned to deal with these tariffs compared to other countries.
“India boasts a vast domestic market and is not as dependent on exports as China. Furthermore, Indian software exports are robust and not impacted by tariffs,” he remarked.
“In conclusion, this presents no significant problem for India,” Mobius conveyed to IANS.
Shipments exceeding $30 billion related to pharmaceuticals and specific electronic goods like smartphones, semiconductors, and energy are currently safe from increased duties, as these items remain on an exemption list. Trump has not yet applied these new tariffs to these crucial sectors, which are expected to take effect within the next 21 days.
Furthermore, in FY25, India exported drugs and pharmaceuticals worth $10.5 billion and electronics products (predominantly smartphones) valued at $14.6 billion, together accounting for 29 percent of its total outbound shipments to the US. Petroleum exports worth $4.09 billion in FY25 are also currently shielded from Trump’s latest tariffs, thanks to their inclusion on the exemption list.
In FY25, Indian exports to the US totaled $86.51 billion.
Mobius added that the current GDP growth India is experiencing will support its ambition of becoming the third-largest economy globally.
“The country is achieving 6-7 percent growth despite global uncertainties, demonstrating its economic resilience. This growth will facilitate India’s ascent in the global economic hierarchy,” Mobius remarked.
In just a few years, India has advanced from being the world’s 11th-largest economy to the fourth largest. As of 2025, India ranks behind the US, China, and Germany in terms of total GDP.
Point of View
It is essential to recognize that India’s ability to withstand the new US tariffs stems from its strong domestic market and diverse export sectors. While foreign policies fluctuate, India's resilience and growth trajectory remain promising, ensuring a secure economic future.
NationPress
05/10/2025
Frequently Asked Questions
What are the new US tariffs on India?
The new tariffs imposed by the US on India are set at 50 percent, impacting various sectors.
How will these tariffs affect India's economy?
According to Mark Mobius, the tariffs are unlikely to significantly impact India due to its large domestic market and strong export sectors.
What industries are currently exempt from the tariffs?
Industries such as pharmaceuticals, electronics (including smartphones), and petroleum are currently exempt from the new tariffs.
What is the current state of India's GDP growth?
India is experiencing a GDP growth rate of 6-7 percent, demonstrating resilience despite global uncertainties.
How has India's economy evolved recently?
India has advanced from the 11th largest economy to the 4th largest in just a few years, positioning itself as a significant global player.
