Whilst in the book the Tiger came to tea and ate all the food in the house, creating quality time for the family who went out together to eat and replenish their food. As we enter the new Trump era the Indian Tiger could again be creating a version of the quality time in the story by offering a safe haven for many companies seeking to shelter from the impact of tariffs, protectionism and geo-political friction. In the evolving global trade landscape, marked by the resurgence of protectionist policies, geo-political tensions and tariffs under the new Trump administration, companies are increasingly seeking reliable and resilient global sourcing markets.
India, the world’s largest democracy, most populous nation and fastest growing economy has so far been uniquely spared any direct policy impact from the incoming administrations. India ambition to become a global manufacturing hub can only benefit from the shift amongst many companies to de-risk their product sourcing positions with China.
Impact of Trump’s Tariff Plan on global sourcing
The new Trump administration’s tariff plan, which includes universal tariffs of 10-20% on all imports and up to 60-100% on imports from China , has significant implications for global trade, company profitability and global sourcing teams. Amongst all the talk of high tariffs and seismic economic shifts the economic powerhouse that has been notably absent from all discussion represents a huge opportunity. This lack of direct reference to India in the tariff planning presents a unique opportunity for Indian exporters and importing companies to fill the gap left by Chinese goods in the U.S. market.
Current landscape of Trump’s Tariff Proposals Against Various Nations
Comparison table outlining the proposed tariff threats under the new Trump administration:
| Country | Tariffs Discussed | Key Sectors Affected | Impact on Trade |
|---|---|---|---|
| China | 60-100% on imports | Electronics, Machinery, Textiles | Significant increase in costs, potential supply chain disruptions, and trade tensions[1]. |
| European Union | 10-20% on all imports | Automobiles, Pharmaceuticals, Machinery | Increased costs for EU exporters, potential retaliatory tariffs, and strained trade relations[2]. |
| Canada | 25% on imports | Automotive, Dairy, Lumber | Higher costs for Canadian goods, potential impact on North American supply chains[3]. |
| Mexico | 25% on imports | Automotive, Agriculture, Electronics | Increased costs for Mexican exports, potential disruptions in US-Mexico trade relations[3]. |
| India | No specific tariffs mentioned | Pharmaceuticals, Textiles, IT Services | Opportunity to fill gaps left by Chinese goods, potential increase in exports to the US[4]. |
Impact on global sourcing and procurement
Interestingly, the new tariff plan does not specifically target India. This lack of direct reference presents an opportunity for Indian exporters to increase their market share in the U.S. by filling any gaps left by Chinese exporters. Whilst key sectors such as pharmaceuticals, textiles, and IT services stand to benefit from this development[4]. The rationale for India as a strategic sourcing market for companies in the USA has increased dramatically.
ET2C International: Global & Indian sourcing experts
ET2C are a British owned global sourcing company with over 23 year’s experience making sourcing simple for our clients. Our 200 colleagues are based in 7 offices in major and emerging sourcing markets including India. Where we have established for many year.
Our team based in Delhi have a deep and insightful knowledge of Indian manufacturers and experience creating and delivering strategic sourcing plans for clients in the USA, Europe and Australia. Delivering:
- Rapid margin improvement
- Risk management
- Transparency and Simplicity in Sourcing
- Quality and Compliance
- Delivering a dedicated buying office team
To rapidly assess how India could transform your strategic sourcing for the year ahead putting India at the centre of your strategic sourcing.
Give us a call contact@et2cint.com
What India brings to strategic sourcing planning
India is developing quickly as a global sourcing market. Driven by the governments ambition to be a global manufacturing hub investment is being made across a range of key enablers to transform India’s ability to compete in global manufacturing and exporting.
India is developing quickly as a global sourcing market. Driven by the governments ambition to be a global manufacturing hub investment is being made across a range of key enablers to transform India’s ability to compete in global manufacturing and exporting.
Economic Stability and Growth –India’s economy has shown remarkable resilience and growth potential, even amidst global economic uncertainties. With a GDP growth rate consistently above 6%, India is one of the fastest-growing major economies in the world.
Diverse and Skilled Workforce – India boasts a large, young, and skilled workforce. The country produces millions of graduates annually, including a significant number of engineers, IT professionals, and management graduates. This talent pool is not only cost-effective but also highly adaptable to various industries.
Government Initiatives and Support – The Indian government has introduced several initiatives to boost manufacturing and exports. The Production Linked Incentive (PLI) scheme aims to enhance domestic manufacturing capabilities and attract foreign investments. Additionally, the “Make in India” campaign encourages companies to manufacture their products in India, providing various incentives and support mechanisms.
Strategic Location and Trade Agreements – India’s strategic location offers easy access to key markets in Asia, Europe, and Africa. The country is part of several regional trade agreements that facilitate smoother trade flows and reduce tariffs. These agreements provide sourcing companies with a competitive edge by lowering costs and improving market access
Building on the already substantial tariff differentials.
Robust Infrastructure Development- India has made significant strides in improving its infrastructure. The development of industrial corridors, smart cities, and logistics parks has enhanced connectivity and reduced transportation costs. The government’s focus on building world-class ports, airports, and highways further strengthens India’s position as a reliable sourcing destination.
Cost-Effective Production – One of India’s most significant advantages is its cost-effectiveness. The relatively lower labour costs combined with high productivity levels make India an attractive destination for manufacturing and sourcing. Companies can achieve substantial cost savings without compromising on quality.
Sourcing from India: The safe haven from Trump tariffs
The new Trump administration’s tariff threats pose significant challenges for many countries, but they also create opportunities for others. India’s exclusion from specific tariff threats positions it as a potential safe haven for sourcing companies looking to navigate the complexities of global trade in this new era.
ET2C International and out team based in Delhi can give you instant knowledge and access to the India manufacturing sector.
- Manufacturer search and selection
- Full validation including ethical, social and environmental accreditations
- Dedicated buying office teams
Now is the time to take action on global sourcing and procurement strategies, whether you are taking your first steps into off shoring parts of your supply chain or looking to derisk current positions in China. India is a country you have to investigate as part of your margin defence and competitive advantage delivery plan.
Contact us now to learn how India can deliver your sourcing ambitions for the year ahead. contact@et2cint.com
