The reciprocal tariff measures imposed by the United States (US) Government under the presidency of Donald Trump have significantly reshaped the trade landscape between the US and the rest of the world, including India. Businesses involved in bilateral trade now face heightened complexity, increased costs, and regulatory uncertainties.

However, on 9 April 2025, the US announced a 90-day suspension of the reciprocal tariffs for most countries (except China). However, pursuant to China’s reaction of imposing an 84% tariff on American goods, the US has retaliated with staggering 125% ad valorem tariffs.

With the dynamics of trade changing daily, it has become critical to monitor developments closely and assess their impact in real-time.

This evolving scenario demands specialised expertise to effectively manage and mitigate tariff-related impacts. At Grant Thornton Bharat, we recognise these challenges and offer customised, comprehensive tax consulting and strategic advisory services to companies navigating this complex business environment. Our experienced team provides practical guidance related to international taxation, customs law, and trade compliance to help your company stay compliant, competitive, and financially strong despite the changing tariffs.

Impact on India

For India, this offers a strategic inflection point to reposition itself as a competitive manufacturing and export hub—especially in key sectors like textile/clothing, steel, aluminium, and auto parts. India now has a unique opportunity to capitalise on evolving trade patterns and supply chain shifts. It must act quickly to leverage Free Trade Agreements, scale up in priority sectors, and re-align global value chains in its favour.

Impact on Indian exporters

These tariffs are likely to pose both challenges and opportunities for Indian exporters, influencing their competitiveness, market strategies, and long-term growth prospects.

Below are the key points that merit consideration:

How can Grant Thornton Bharat help you?

  • Impact assessment vis-a-vis comparison with the impact on alternate sourcing by the US buyer
  • Immediate, medium- and long-term assessment
  • Assessment of the impact of 90 days pause and tariff war between the US and China
  • Explore maximisation of supplies in the 90-day window
  • Negotiation with buyers and suppliers
  • Resources management
  • Identifying alternative destination markets to China
  • Value addition
  • Exploring and facilitating setting up manufacturing in the US and/or lower tariff zones, including a tie-up with the contract manufacturers
  • Facilitating setting up facilities for companies planning to come to India from higher tariff zones like China and Vietnam
  • Country-specific feasibility studies considering the changed circumstances
  • Tax and trade insights for entering non-US markets
  • Strategic support for shifting or expanding supply chains globally
  • CAROTAR norms and compliances
  • Assistance related to anti-dumping/ safeguard duty-related proceedings across the globe
  • End-to-end support towards setting up facilities across the globe
  • Policy advocacy
  • Long-term planning to manage exposure to trade policy risks
  • Scenario planning and sensitivity analysis for pricing models
  • Integration of tariff changes into overall tax and compliance strategy

Why Grant Thornton Bharat?

1.

An experienced team, with over 100 years of domain expertise in international tax and trade advisory

2.

Industry-specific insights, customised for exporters, manufacturers and MNCs

3.

Proven track record in handling global tariff and compliance matters

4.

Agile, responsive, and fully client-centric approach

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Trump’s reciprocal tariffs

This note discusses the recent announcements and the possible impact of the reciprocal tariffs by the US on India.