US tariff impact: India Inc against knee-jerk reaction, seeks new markets

Business Standard

3 hours ago

India Inc is calling for measured diplomacy, rather than any posturing, as the country navigates US President Donald Trump's looming 25 per cent tariff on Indian exports.
At the same time, business leaders stress the need to strengthen domestic manufacturing and explore new markets, even as they continue talks to head off the proposed tariff. Drawing parallels with the liberalisation that followed India's foreign exchange crisis more than three decades ago, Mahindra asked whether the current 'global manthan' over tariffs could yield some 'amrit' for the country.
In a detailed reflection shared on social media, Mahindra said India has radically improved its ease of doing business. Mahindra called for the creation of a genuinely effective single-window clearance system for investment proposals. Acknowledging that many regulatory powers lie with individual Indian states, he proposed a coalition of willing states aligned with a national platform to streamline and simplify approvals. If India can demonstrate speed, transparency, and predictability in this area, Mahindra believes it could emerge as an irresistible destination for global capital in a world searching for trusted partners.
Mahindra also stressed the need to unlock tourism as a major foreign exchange driver. He described tourism as one of India's most underexploited economic assets and called for urgent improvements in visa processing, tourist facilitation, and the development of dedicated tourism corridors. These corridors, he said, should prioritise security, sanitation, and hygiene, and serve as model destinations that inspire replication across the country.
In addition, Mahindra advocated for broader policy action to boost India's competitiveness and resilience. His recommendations include more liquidity support for MSMEs, accelerated infrastructure investment, a stronger focus on manufacturing through expanded production-linked incentive schemes, and rationalisation of import duties to reduce input costs for domestic manufacturers.
RPG Group Chairman Harsh Goenka said US can tariff India's exports, but not its sovereignty. 'Raise your tariffs — we'll raise our resolve, find better alternatives, and build self-reliance. India bows to none,' he said in a social media post. 'We have to talk to other business partners like China as India would like to have leverage while negotiating with the US,' he told Business Standard.
Prime Minister Narendra Modi is scheduled to visit China to attend the regional summit SCO (Shanghai Cooperation Organisation) summit in Tianjin from August 31 to September 1.
Ronnie Screwvala, founder of UpGrad, weighed in, describing the US as a 'fair-weather country'. 'We need to fix it for the long term. No country 'becomes great' in isolation and that is their lesson to learn,' Screwvala said, adding that India has come out strong from Covid and tariff is not Covid and its antidote is only resolving and building, not negotiating.
He called for unleashing India's entrepreneurial potential. 'Let's unleash Entrepreneurship in every sense. It's a once-in-a-lifetime opportunity to set the India consumption story to new levels and partner mainly with those who want to grow the India market. Our rural 600 million population is a powerful source and if we harness them into the real India story, nothing can stop us," he said in a social media post.
Raymond Group CFO Anit Agarwal said the issue between India and US would be resolved amicably as both American customer and Indian suppliers won't pay for the additional tariff for their products. 'Don't rush, don't take any knee-jerk reaction,' Agarwal suggests. 'Ultimately, the solution should be a win-win deal for all.'
A senior US-based CEO, speaking anonymously, said India must tread diplomatically: 'India should not upset the apple cart. They must increase diplomatic efforts to solve this issue without aggravating the situation.'