India looks ready for an agreement with the United States – but at any cost?

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Modern reports indicate this India proposed a zero tariff for imports From steel, car components and pharmaceutical preparations from the United States on a mutual basis to a certain amount.

This indicates a major shift in the approach of the country of South Asia, as it relied on it Huge import duties on goods From agricultural products to auto parts, shoes, jewelry and information technology to protect their local industry.

Data from the World Trade Organization to activate India Average simple tariffs by 17 %Much higher than US 3.3 %Starting from 2023.

It seems that the 26 % tariff that was announced last month on Indian exports – suspended at the present time – has prompted the country to rethink its protective position.

India, in fact, Among the nearby countries The commercial deal with the United States last week, Trump said the negotiations were “great … we will have a Dealing with India“

“The future of India depends on reducing commercial barriers and opened itself to more free trade deals with other countries, especially the United States,” said Malcolm Dorson, chief portfolio manager at Global X ETFS.

The United States is the largest commercial partner in India Bilateral trade of up to $ 129 billion In 2024. India had a surplus of $ 45.7 billion.

“For the economic growth of India, from 6 % to 8-9 %, it needs foreign investment and to ensure that its goods enjoy a global market,” Shumita Davishwar, chief economist in India said, adding that reducing its protective position and reducing the organizational burden is what will move the needle to India.

Where do you leave a commercial deal, especially with zero ranks on some commodities, leave India’s ambitions Enhancing its local manufacturing?

“India will be keen not to do anything that harms local companies,” Davishwar told CNBC in India.

She said: “Yes, India wants an agreement with the United States because it is our largest market in terms of imports and services of goods and services. But the zero tariff is very ambitious and I do not see the government take a big step.”

Other experts suggest that even if the deal includes India canceling the definitions of certain sectors, this will not be particularly harmful to all of these industries.

Peeush Mittal, the director of Portfolio in Matthews ASIA, does not see a major impact on steel and pharmaceutical sectors in India.

Metal said that the export of steel from the United States to India is a “suggestion of money loss”, given the high transportation costs. “I find it very difficult to believe that, even with a zero tariff, American steel producers will be able to sell in India.”

On the front of the drugs, Metal notes that the United States produces many patented drugs of up to “hundreds of thousands of dollars”, which only the wealthy can carry. He said that the vast majority of such products will be priced, adding that the absence of a tariff for drug imports “will not change the structure of the industry in India.”

With Trump aims to develop the health care sector in the United States, the real challenge will be if the country reduces the imports of Indian drugs, or the worst if the public Indian pharmaceutical companies that work on somewhat thin margins are required to create manufacturing facilities in the United States

Metal said that such moves will have “long -term consequences and will offer economic contributions to the pharmaceutical sector in the growth of India.”

It also does not expect a material impact on the auto sector in India, if the country gives way to more American car parts or car imports.

Ford and General Motors Previously, manufacturing operations were in India. However, the attractiveness of their cars was “little among buyers,” Metal said.

“The man at the bottom of the pyramid wants cheap Indian compounds and the man in the middle to the top is looking for luxury.”

It will be difficult for these companies to utter now, because local manufacturers are like Tata Motors As well as Japanese and South Korean brands such as Suzukiand Toyota Metal said that Hyundai has deep roots in comprehensive and distinctive consumer markets, while the high network category that prefers continental brands such as Mercedes and BMW.

Inside the area, Dorson is bullish on private banks such as HDFC and Icici That has been reported to strong profits in the first quarter. He also loves medium banks Axis Bank and Federal Bank As well as financing companies, including Telecom Sherram Which is scheduled to do well from the “overall rise in the sector”.

Dorson also expects that steel and pharmaceuticals will be directed to the spotlight, if a deal is concluded because it is likely to be able to reach the US largest market.

JSW Steel and Steel salad in India In steel and Cipla and Dr. Reidi Laboratories He said that medications will be the most sensitive to commercial addresses – gains in the event of a deal and loss if there is nothing.

Meanwhile, MITTAL expects that the commercial deal for logistical services companies – through port operators, railways and ground transport service providers – will benefit their services. His choices: India company containers and Ashok Liland.

Regardless of the results of commercial negotiations, Dorson climbs in the consulting giants Tata Consultance Services and Infosys Given that it focuses on services, and it “does not make or send anything to the United States”

Metal said that another sector is to exceed performance, regardless of the deal, is the consumable foodstuffs. It is described by “the right place”, as it will benefit from the high consumption in the low inflation and interest rate.

Metal is also betting on the area of ​​electronics as international companies, outside the United States seeking to obtain Indian players. “The ecological system has become greater in India and we believe it will become a self -investigation,” Metal said, which is the naming of Avalon technologies as an arrow he loves in the sector.

India made strikes against Pakistan after strict attacks in Jammu and Kashmir. Country The Ministry of Defense said That its armed forces were He performed a military operation against Pakistan What you call Jamo and Kashmir, which is occupied by Pakistan, targeting “terrorist infrastructure”. The ministry said that the strikes, which targeted nine sites, followed a similar attack in PAALGAM, Jammu and Kashmir, in which 26 people were killed last month.

India and the United Kingdom signed a bilateral trade agreement on Tuesday. Under the deal, India will Taxes gradually decreased on imports from the United KingdomWith the vast majority of goods circulating, “completely free of customs tariffs during a decade,” according to the UK government. For example, the customs tariffs in India will be reduced on auto imports from the UK, from more than 100 % to 10 %. The Indian government said that the UK will remove all definitions on 99.1 % of imports as soon as the agreement appears.

The service activity in India grew in April. the HSBC India Services Index It rose 58.7 in April, ravagely higher than 58.5 in March, but less than the initial estimate of 59.1. The number above 50 indicates an expansion of the activity. but, The confidence of work between service providers It fell to its lowest levels in nearly two years.

On CNBC TV this week, Gary Sheling, a market analyst, spoke to “The Bottom -TRIDE” in CNBC, explaining the reason for his refinement in India. The population of the country will now be largest in the world after China has crossed, The growth engine for its economyAccording to Celling. “You can only put many cars in your path, but in services, you can spend nearly an unlimited amount of money on entertainment, travel, medical services, etc.” you can only put many cars in your path, but in services, you can spend nearly an unlimited amount of money on entertainment, travel, medical services, etc.. “

Meanwhile, the regional CEO of the World Gold Council, Sashin Jain The gold market was witnessing a strong impetus Amid the increasing interest in digital gold and the traded investment funds. Jane said that the “physical” gold, which was important in India, is less important to investors, especially those in the younger generation, causing an increase in the demand for digital gold.