Trump Tariffs Fail to Deter India’s Emerging Businesses

Quick Summary

• US president Donald Trump has escalated his tariff war on India,threatening significant tariffs for procuring Russian oil and selling it for profits.
• He announced a 25% duty on all Indian goods and criticized India’s purchase of Russian military equipment.
• India has highlighted the hypocrisy of the US and EU in continuing too import goods from Russia while criticizing India’s procurement practices.
• Despite the tariff threats, business registrations in India remain strong:

– July saw an 18% rise in new company incorporations year-over-year (17,555 companies formed).
– Limited liability partnerships (LLPs) surged by a quarter to 7,343 registrations this July; April-July saw increases of >26% for companies and >29% for LLPs from last year.

• The IMF raised India’s GDP growth forecast to 6.4% for FY26-FY27, even though tariffs may dent growth by up to 30 basis points this fiscal year but won’t likely impact domestic demand significantly.
• Global CEOs (e.g., Apple, PepsiCo) see clear signs of recovery in India’s market demand after months of decreased sales; sectors like rural consumption are bolstered by favorable monsoon conditions and welfare spending.

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Indian Opinion Analysis

Trump’s escalating trade policies pose clear challenges for India’s ability to maintain seamless export channels with its largest trading partner. Nevertheless, current indicators suggest resilience within the Indian economy. Domestic demand continues as a key driver even amid external pressures such as geopolitical volatility or rising tariffs.

The surge in business formations underlines confidence within entrepreneurial circles despite mounting global risks-perhaps reflecting strong fundamentals or optimism about long-term growth opportunities after structural reforms.

India’s GDP projection remains largely positive despite potential headwinds from US tariffs. This outlook is aided not only by improved domestic factors like stable inflation but also interest rate versatility at policy levels that support economic expansion during uncertain global cycles.

However, prolonged trade disputes with strong powers like the US could have downstream impacts on bilateral relations beyond commerce alone. Securing favorable trade agreements or diversifying export partnerships might be critical steps to reinforce stability across India’s evolving economic landscape without compromising its broader strategic autonomy globally.