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Ashok Gulati, Distinguished Professor at the Indian Council for Research on Economic Relations, predicts that it would take three to six months for global markets to stabilise and for countries to adjust their trade strategies.
"This is a 440-volt shock that President Trump has given to the entire world to reset. He is correcting the entire world trade order," he said.
He emphasised the need to analyse tariffs in relation to competing nations. For example, the tariff on Indian rice is now 27%, but will the US stop consuming rice? If they import from Vietnam or Thailand, their tariff structures are even higher. This could give India a competitive advantage, he noted.
The textile industry could also gain. For the last 10 to 15 years, Bangladesh and Vietnam have outpaced India in global textile exports. However, with Bangladesh facing a 37% tariff, China at 34%, and Vietnam possibly at 45-47%, India could gain a relative advantage in apparel exports, Gulati said.
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However, not all sectors will benefit. Ajay Srivastava, Founder of Global Trade Research Initiative, pointed out that marine products and auto components are at a disadvantage.
Srivastava warned that US President Donald Trump’s latest tariff policies will raise costs for US consumers, leading to higher inflation.
"More inflation means interest rates, which means, foreign portfolio investors (FPIs) will be withdrawing money from the world over. That means stock markets world over will feel duress," he explained.
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In the financial sector, Gulati expects a slowdown.
For the full interview, watch the accompanying video
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