India ought to diversify its IT exports to mitigate dangers arising from potential tariffs beneath US President-elect Donald Trump as a good portion of India’s IT export income comes from the US, suppose tank International Commerce Analysis Initiative (GTRI) mentioned on Sunday.
India’s complete software program service exports stood at $205 billion in 2023–24. The US accounted for 54 per cent of those exports, adopted by Europe at 31 per cent, based on the Reserve Financial institution of India’s (RBI) annual survey on laptop software program and data technology-enabled providers (ITES) exports.
This comes as Trump is broadly anticipated to extend scrutiny of the H-1B visa programme as he has imposed a number of measures to limit immigration throughout his first time period too. Curbing immigration was additionally one in all Trump’s key ballot guarantees.
GTRI additionally emphasised that there’s a want for India to strengthen its knowledge insurance policies, resist exterior pressures to share home knowledge freely, and keep its rejection of the Indo-Pacific Financial Framework for Prosperity (IPEF) commerce pillar, which may constrain India’s means to form its digital and labour insurance policies.
Throughout Trump’s first time period, disagreements over knowledge localisation had been a key supply of friction between India and the US. India resisted altering its stance on knowledge localisation in plurilateral agreements on the WTO and tightened its rules. As an example, in April 2018, the RBI mandated that fee system suppliers, equivalent to Mastercard and Visa, retailer Indian residents’ fee knowledge inside India.
Nonetheless, India’s draft e-commerce coverage, which incorporates sturdy localisation provisions, stays stalled, presumably because of US stress.
The report additionally highlighted that international locations like Mexico, Canada, and the ASEAN bloc benefited extra from the US-China commerce battle than India. GTRI mentioned that India ought to strengthen its home provide chains, produce vital intermediates to scale back reliance on China, and enhance value effectivity and ease of doing enterprise to reinforce export competitiveness.
With Donald Trump returning as US President, GTRI mentioned that the evolving commerce panorama presents vital alternatives for India. Trump’s plans for brand new tariffs concentrating on Mexico, Canada, China, and others may work to India’s benefit.
“India additionally benefited considerably, with US imports from India rising by $36.8 billion throughout this era, rising from $50.5 billion to $87.3 billion. This made India the sixth largest contributor to the rise in US imports,” the report acknowledged.
Key drivers of India’s export progress included smartphones and telecom tools, which contributed $6.2 billion (17.2 per cent of the entire improve), medicines at $4.5 billion (12.4 per cent), petroleum oils at $2.5 billion (6.8 per cent), and photo voltaic cells at $1.9 billion (5.3 per cent). Gold jewelry and lab-grown diamonds collectively added $2.3 billion.
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