US Tariffs: Is It Change Or Die Moment For India’s Businesses? PwC Decodes

As the world eagerly awaits Donald Trump ’s tariff announcement on April 2, the domestic manufacturing sector are adopting a wait-and-watch approach. With the U.S. President already imposing a 25% tariff on automobiles, the broader global impact of these trade measures remains uncertain.

A report by PwC analyzing the effects of U.S. tariffs on India suggests that Washington and New Delhi could face potential disputes over issues such as digital taxation and data localization due to Trump’s trade policies.

According to PWC report, the evolving U.S. trade policies, including tariff realignments and other measures, require Indian businesses to develop a long-term resilience strategy. The IDEA Framework – Invest, Diversify, Express, and stay Aware - provides a structured approach to navigate trade uncertainties and leverage emerging opportunities.

The report also noted that investing in sustainability and advanced technology can help businesses stay competitive and qualify for potential tariff exemptions in the future. 

“Invest in automation, AI-driven supply chain solutions, and digital trade compliance tools to enhance compliance with global trade norms, and faster pace as compared to competitors,” the report stated.

To minimize risks from trade restrictions, businesses may explore new export markets and reduce dependence on a single source of raw materials or single suppliers, as per the report

"Businesses should continuously assess tariff developments and their anticipated impact on costs, pricing, and competitiveness. Undertaking initiatives for keeping the organization updated with evolving market scenario would prove to be beneficial in the longer run, including vis-à-vis its competitors," mentioned the report.

With trade policies shifting frequently, businesses must stay updated and adapt strategies dynamically, to ensure minimized negative impact and tap into created opportunities, the report stated.