Following Donald Trump’s victory in the US presidential election, a report from CareEdge suggests that India could benefit from potential changes in global trade dynamics if Trump goes ahead with plans to impose high tariffs on Chinese imports. By reshaping the global supply chain away from China, these policies could create new opportunities for India.

According to the report, Trump’s proposed trade measures include a 60 percent tariff on imports from China. Additional tariffs of 10 to 20 percent are also considered for goods from other countries. Such policies aim to reduce US reliance on Chinese imports, a move that could disrupt established trade channels and prompt companies to seek alternative production centers outside of China. “India could benefit from any reorientation of the global supply chain away from China,” the report said.

As the report explains, these measures would likely cause US companies to explore manufacturing options in other countries to avoid the tariffs. India could emerge as a viable destination, providing a potential boost to its manufacturing sector and export economy. However, the report warns that these high tariffs may have wider economic effects, particularly in the United States. It notes: “Higher tariffs could lead to disruption of global trade flows and weaker overall trade growth. They will also lead to inflationary pressures in the US economy, with upward pressure on the prices of imported goods.”

This potential increase in US prices could affect global trade flows, leading to slower growth in global trade. For India, a reorientation of supply chains presents both an opportunity and a risk. While India could attract new business, a general slowdown in global trade could reduce demand for Indian exports, affecting various sectors in the country.

Trump’s proposed tariffs are not limited to China. The report points out that it has also focused on Mexico, with plans for a 100 to 200 percent tariff on Mexican-made cars. Trump also proposed a 25 percent tariff on other imports from Mexicoif Mexico fails to reduce border crossings into the United States. These proposed tariffs aim to prevent Chinese firms from setting up production in Mexico to avoid US import duties. “Through these movements, trump card aims at prevention Chinese companies to set up factories in Mexico to avoid US tariffs,” the report said.

While these policies present challenges to global trade, they also provide India with a strategic opportunity. As global firms consider alternative manufacturing locations, India could position itself as a reliable hub if it can strengthen its industrial infrastructure and improve its business climate.

Ultimately, India’s success in capitalizing on these changes will depend on its ability to streamline business processes, improve infrastructure and position itself as an attractive alternative in the evolving global supply chain landscape.