Trump’s tariff sparks industry response

Donald Trump, president of the United States, has invoked a blanket 26% tariff on all imports from India. This is among a spate of tariffs announced for 180 countries that have sent global markets into a freefall. 

These tariffs are a significant moment in the history of relations between India and the US. There is a 10% baseline tariff, too. Notably, tariffs are currently at half of what other countries charge on US products. 

Currently, India-USA bilateral trade on paper is not quite significant. For major grades of paper, while India’s exports to the US were about USD 54-million in 2023-24, India’s imports from the US were to the tune of USD 154-million.

Industry reactions 

Commenting on the development, Arun Kumar Bharati, highlighted the potential benefits for Indian manufacturers. “Higher costs on U.S. imports like waste paper and pulp will drive a stronger focus on local sourcing and recycling infrastructure,” he said. “Retaliatory tariffs on U.S. paper products could help Indian firms capture a larger domestic market share, boosting profitability and market reach.” Bharati also anticipates Indian companies diversifying their export strategies, targeting markets in Africa, Southeast Asia, and the Middle East.

Rohit Pandit, secretary general, Indian Paper Manufacturers Association, also senses an opportunity for India—“The reciprocal tariff imposed by the US on India (27%) are lower than the tariffs imposed on China (34%), Indonesia (32%), Thailand (37%) and other competing Asian countries. This may provide some relative competitive advantage to India vis-a-vis other competing Asian countries in exporting paper to the US.” However, Pandit warns of potential downsides, including trade diversion from export-heavy Asian economies. Excess inventories from China and Indonesia could flood the Indian market, exacerbating existing pressures from paper dumping.