It is a bittersweet time for India, which was waiting for a rescue of reciprocal rates of the United States due to the ongoing negotiations of a bilateral trade agreement (BTA). However, United States President Donald Trump announced a reciprocal rate “discount” in India of 27%, which will begin from April 9 before April 5, the United States will receive a 10% universal rate for all imports arriving in the country.

A more detailed look of the reciprocal rate system formulated by the United States shows that India will gain a competitive advantage compared to China and Vietnam, which have been beaten with much higher rates of 34% and 46%, respectively. Similarly, the United States also plans to collect a 37% rate in Bangladesh and 36% in Thailand. The US will not charge any tariff in certain essential and strategic articles such as pharmaceuticals, semiconductors, copper and energy products such as oil, gas, coal and LNG. Imports of steel, aluminum and automobile products in the United States will face a 25%rate.

Indian government officials who were at the point of surveillance of United States ads throughout Wednesday, are understood to review the impact of these policies. While Indian Indian exports to the United States can be able to help India increase their long -term average manufacturing capabilities, concerns abound on economic growth perspectives, as well as the growth of short -term exports.

Sources said that the way the rates will be applied is still a crucial problem to understand, and this would ultimately affect India’s general perspectives. Concerns are also emerging on a commercial recession in the United States economy that could affect the global economy.

According to an analysis by Emkay Global Financial Services, India exports to the United States could drop $ 30 and $ 33 million or 0.8-0.9% of GDP with 26% rates, without adjusting for country hits or responses.

A report by Macquarie emphasized that there is a prominent risk for GDP projection of 6.7% by RBI by 2025-26 against 6.5% by 2024-25 due to commercial wars. “Keep in mind that the pharmaceutical company, the semiconductors and some other sectors are exempt so far and with a bta that is expected to be signed with us during the back of the year, we have to see what the implications of the possible GDP are,” he said.

VK Vijayakumar, head of Geojit Investment Investment Strategy, said that the greatest concern is that this would trigger retaliation rates in other countries, which results in a complete trade war, affecting global trade and global growth. “The highest inflation in the United States will put the FED in a tight place; it would be difficult for the FED to matter the fees expected by the market by 2025. The likelihood of a U.S. recession in late 2025 has increased. This is bad news for the economy and global markets,” he emphasized.

The United States is the largest commercial partner and the largest export market. According to the Ministry of Commerce data, India’s share in United States imports went from 0.9% in 2001 to 2.8% by 2023.In the same period, India imports to the United States increased a 10.48% CAGR compared to a 4.76% increase in imports from the rest of the world to the United States.

A GTRI report showed that the highest reciprocal rate of the United States in various Asian countries, such as China, Vietnam, Taiwan, Thailand and Bangladesh, presents an opportunity for India to strengthen its position in world trade and manufacturing. “However, gains will not automatically accumulate. India needs profound reforms to allow scale production, additional value adding and improving competitiveness to benefit,” he said.

India could be gained in sectors such as pieces of dress and textiles with respect to Bangladesh, as well as in electronics telecommunications and smartphone sectors, it is likely that countries like Vietnam and Thailand will lose their costs competitiveness due to the strong United States rates.