India Set to Gain from U.S. Tariff Changes, Eyes Foreign Investment Boost

India is poised to become a major winner from the United States' latest tariff policy, according to a report by Arihant Capital. The report suggests that Washington may levy lower tariffs on Indian imports than on those from several other Asia-Pacific nations, thus placing India in a strong position to attract increased foreign investment and bolster its manufacturing capabilities amid shifting global trade flows.

The analysis highlights that while countries such as Cambodia and Vietnam face higher tariffs, India stands to gain from trade and investment realignment, a development supported by existing and ongoing bilateral agreements. Among these is the recent signing of the UK-India Free Trade Agreement in May, and continued negotiations with the European Union, both of which are anticipated to enhance India's status as a global manufacturing hub.

However, the report also cautions that the U.S. government's drive to bring back key manufacturing sectors could temper India's overall gains. On Wednesday, U.S. President Donald Trump announced tariffs on products from 14 countries, with Brazil facing the steepest hike at 50% on copper. Meanwhile, India's potentially favorable tariff treatment could make it an attractive destination for companies looking to establish operations.

(With inputs from agencies.)