India looks ready for a transaction with the US – but at what cost?

This report will include a newsletter “Inside India” this week, which brings you timely, insightful news and comments to the market to the new power plant and large enterprises behind its meteorous lift. How is what you see? You can subscribe Here.

Recent reports indicate this India offered zero tariffs on imports From steel, car parks and pharmaceuticals from the US on a mutual basis.

This signals a serious shift in the approach to the South Asian country as it rested Healthy import duties on goods In the range of agricultural products to automotive parts, shoes, jewelry and information technology to protect its internal industry.

The World Trade Organization data will lead to India A simple average tariff by 17%significantly higher than US ‘3.3%As of 2023.

26% of Trump tariffs, announced last month on Indian exports – still – it seems, pushed the country to rethink their protectionist position.

India, indeed, This is among the countries approaching Last week’s trade transaction with the US, Trump said the negotiations are undergoing ” deal with India“

“The future of India depends on reducing trade barriers and opening itself to more free deals with other countries, especially with the US,” said Malcolm Drson, Senior Global X ETFs portfolio.

US is the largest trading partner in India, with Bilateral trade that reached $ 129 billion In 2024. India had $ 45.7 billion.

“In order to scale the economic growth of India from 6% to 8-9%, it needs foreign investment and ensure that its goods have the global market,” said the chief economist of India Shumita Deveshwar in TS Lombard, adding that relaxing its protectionist position and a decrease in the norm.

Where it is engaged in a trade transaction, especially with zero tariffs for certain goods, leaves ambitions of India pressing one’s domestic production?

“India will be careful not to do anything that will harm the domestic business,” Daveshwar said in India CNBC.

“Yes, India wants to negotiate with the United States because it is our largest market in terms of import and export of goods and services. But zero tariffs are quite ambitious, and I do not see the government makes such a big step,” she said.

Other experts believe that even if the transaction involves the cancellation of tariffs in certain sectors, it will not be particularly harmful to all these industries.

Peyush Mittal, Matthews Asia portfolio, does not see a significant impact on the India steel sectors, pharmaceuticals and auto parts.

Mythital said exports from the United States to India – a “loss of money”, given the high transportation costs. “It is very difficult for me to believe that even at zero tariffs, manufacturers will be able to sell in India.”

On the front of the pharmaceuticals, Mittal notes that the United States produces many patented drugs that make up “hundreds of thousands of dollars”, which can only afford heavy -duty. According to him, the vast majority will be evaluated from such products, adding that the lack of tariffs for pharmaceutical imports “does not change the structure of the industry in India”.

As Trump seeks to develop the American Health Sector, the real problem would be if the country is reduced by Indian drug imports, or at worst, if common Indian pharmaceutical companies operating at fairly subtle stocks

Such steps will be “distant consequences and will endanger the economic contribution of the pharmaceutical sectors to India’s growth,” Mittal said.

It also does not expect a significant impact on the India’s auto sector when the country gives way to more auto parts in the US or car import.

Freod and General Motors Previously, there were production operations in India. However, the appeal for their cars was “little among the buyers,” Mittal said.

“The guy at the bottom of the pyramid wants cheap Indian cars, and the guy in the middle is looking for a luxury.”

With these companies it would be difficult to do now as local manufacturers such as Tata Motors as well as Japanese and South Korean brands such as Suzuki. Toyota And Hyundai have deep roots in the mass and premium consumer markets, while the ultra-high class class prefers continental brands such as Mercedes and BMW, Mital said.

In the Dorson space in private banks such as HDFC and ICICI Which recently reported strong profits in the first quarter. He also likes medium -level banks Bank Axis and Federal Bank as well as financial companies including Shriram Finance The planned to do well with the “general rise in the sector”.

Dorson also expects steel and pharmaceutical companies to be focused if the transaction is reached, as they will probably get more access to a larger market in the US.

JSW steel and Steel authority of India in steel space and Cipla and Doctor Redi’s lab Pharmaceuticals will be most sensitive to trade headlines – profit in case there is a deal and loss, if not, he said.

Meanwhile, Mittal expects that trading transaction in favor of logistics companies – for port operators, rail and road transport services – will be a higher demand for their services. His election: Container corporation of India and Ashok Lyland.

Regardless of the results of the trade negotiations, dorson is at the Advisory Giants TATA Consulting Services and Infosys Given that they focus on services and “do not produce and do nothing to the US”

Another sector that should surpass, regardless of the deal, is consumer staples, Mittal said. Calling it “a place to be” because it benefits from higher low inflation and interest rate conditions.

Mittal also bet on electronic space because global companies outside the United States are looking for Indian players. “In India, the ecosystem becomes greater, and we believe it will become self-realized,” Mittal said, calling Avalon Technologies as the stock he likes in this sector.

India carried blows against Pakistan after the attacks of the belligerent in Jamma and Kashmir. In the country The Ministry of Defense has stated that were his armed forces conducted a military operation against Pakistan And what he calls, occupied by Pakistan Jamm and Kashmir, focusing on the “terrorist infrastructure”. The strikes, which aimed at nine sites, followed the attackers of the soldiers in the funeral, Jammu and Kashmir, in which 26 people were killed last month, the ministry said.

India and UK signed a bilateral trade agreement on Tuesday. Under the transaction India will Gradually reducing import taxes from the UKWith the vast majority of trading goods, they become “completely tariff for the decade”, according to the UK government. For example, India’s tariffs on automotive imports from the UK will dramatically reduce from more than 100% to 10%. The Indian government said the UK remove all tariffs by 99.1% of imports as soon as the agreement enters into force.

Official activity in India grew in April. A HSBC India Services Services Comming Management ‘Index In April, he rose 58.7, slightly higher than in March 58.5, but did not correspond to the previous assessment of 59.1. The image above 50 indicates the extension of activity. However, trust in business among service providers In two years he fell to the lowest.

This week, CNBC television, Harry Shilling, a market analyst, made CNBC’s “essence”, explaining why he was Bull in India. The country’s population, now the world’s largest after overtaking in China, will Growth engine for its economyAccording to Shiling. “You can put so many cars on the road, but you can spend almost an endless amount of money on vacation, travel, medical services and so on,” Schilling added.

Meanwhile, regional CEO of World Council for Gold Sahin Jane said The gold market saw a strong impetus Against the backdrop of interest in digital gold and ETFs. Jane said the “physicality” of gold, which is so important in India, especially for investors, especially those in the younger generation, which causes an increase in demand for digital gold, Jane said.