New Delhi: US President-elect Donald Trump’s stated goal of hiking import tariffs in a bid to ensure markets for US exports and create jobs at home to Make America Great Again has spooked global investors. Countries are contemplating their capex to ramp up production foreseeing an incoming impact on their exports. Trump had also called India the “biggest tariff charger” during his campaign in the run-up to the presidential polls. So, will Indian exports lose their edge once Trump assumes office? Morgan Stanley does not agree.
According to Morgan Stanely chief Asia economist Chetan Ahya India can offset the potential impact of tariff hikes by “apitalising on structural tailwinds and continuation of the right policy mix.”
Why Morgan Stanley is positive on India’s prospects against Trump tariffs
The US brokerage has maintained India’s Q12025 GDP growth outlook at 6.8 per cent, up from 6.7 per cent in the December quarter of 2024 and 6.3 per cent in Q3. Indian tariffs on US exports peaked at 9.5 per cent in 2022, before being rolled back in 2023 on imports such as apples and agricultural goods. Morgan Stanley’s chief India economist Upasana Chachra a 10 per cent hike in import tariffs on India is likley to have a 30 basis points (bps) impact on India’s growth.
Fitch Ratings has also supported this vision by adding potential tariff hikes by Donald Trump since the Indian economy is less export-oriented.
Morgan Stanley on Japan, Asian economies’ trade prospects under Trump
Speaking on Japan, Morgan Stanley stated that nearly 70 perc ent of Japanese exports were tariff exempted in the US. Morgan Stanely noted that the Asian region’s reliance on US markets was a double-edged sword since the advantage of size offered by the US market is offset by potential trade disputes which the Trump administration may employ to narrow its trade deficit with other countries. It is required that Asian policymakers diversify their partnerships and derisk from over-reliance on US markets for their exports, Morgan Stanley said.
US brokerage Morgan Stanley said India is relatively insulated from any potential hike by Donald Trump administration once he assumes the US presidency. Here’s why Economy Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
