India will face over USD 14.6 bn in additional duties, if US imposes 20 per cent tariff: BCG Report
Nishant Gupta, Managing Director and Partner at BCG India, highlighted India's growing appeal as a global manufacturing hub, stating, "India is poised to redefine its role in global trade, with a projected annual growth rate of 6.4 per cent in both GDP and trade over the next decade."
ANI
Jan 13, 2025 14:26 IST
New Delhi [India], January 13 (ANI): The ASEAN region, alongside India, stands out as a major beneficiary of the ongoing geopolitical shifts. India's trade is forecasted to grow at an impressive 6.4 per cent annual rate, reaching USD 1.8 trillion by 2033 according to Boston Consulting Group (BCG) report.
Nishant Gupta, Managing Director and Partner at BCG India, highlighted India's growing appeal as a global manufacturing hub, stating, "India is poised to redefine its role in global trade, with a projected annual growth rate of 6.4 per cent in both GDP and trade over the next decade."
ASEAN's trade is similarly set to grow at 3.7 per cent annually, driven by enhanced manufacturing capabilities and deeper integration into industrial value chains.
BCG's analysis reveals that with the proposed 20 per cent US tariff hike across-the-board on all imports from India, it will face over 14.6 bn in additional duties
US imports from India totalled USD 84 billion in 2023 and India benefits from a low effective US tariff rate of 3 per cent. A 20 per cent tariff on imports from India would hit biopharma and auto parts hardest. Import duties on these two sectors would rise by over USD 3 billion.
Similarly, a 60 per cent tariff on Chinese goods would increase the cost of importing consumer electronics into the U.S. by USD 61 billion. Additionally, tariffs on other nations could add USD 640 billion to U.S. import costs, compelling companies to explore alternative suppliers and regions.
The report says that global trade is projected to reach USD 29 trillion by 2033, but trade landscape will change dramatically because of the US trade tariffs.
As trade with the U.S. and EU slows, China is increasingly focusing on the Global South. Annual trade between China and these nations is projected to surge by USD 1.25 trillion by 2033, representing a 5.9 per cent annual growth rate. This shift aligns with China's strategy to reduce economic reliance on Western economies.
The Global South, comprising 133 developing nations, is set to play a more prominent role in global trade. This bloc currently accounts for 30 per cent of global trade and is expected to see trade among its members grow by USD 673 billion annually by 2033, with a 3.8 per cent annual growth rate.
The US, Mexico, and Canada are solidifying as a resilient trade bloc, with trade expected to grow by USD 315 billion and USD 147 billion, respectively, by 2033. Meanwhile, the EU is focusing on enhancing competitiveness and reducing reliance on Chinese and Russian imports.
Marc Gilbert, a senior partner at BCG, emphasized the need for businesses to adapt swiftly to these changes and said, "For business leaders, being ahead of the curve has never been more critical."
He added, "Continuing to develop agile supply chains and, most critically, making sure they have the ability to sense and react to geopolitical shifts will all be necessary skills to operate in this new, fast-moving and high-stakes reality." (ANI)
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