MUMBAI: India on Thursday reacted cautiously to US President Donald Trump's sweeping tariffs with exporters saying the flat 26 percent on exports imposed on fifth-largest economy could have been far worse.
Indian stocks fell at the open of trading on Thursday, with the benchmark Nifty index trading nearly 0.3 percent down in morning trading.
Trump said that Indian Prime Minister Narendra Modi was a "great friend" but that he had not been "treating us right", speaking while unveiling the tariffs at the White House on Wednesday.
The Indian government has yet to comment publicly on the announcement, but exporters said they were disappointed and relieved in equal measure.
"The tariffs slapped on India are definitely both high and higher than expected, which will hurt demand for our exports," Ajay Sahai, director general of the Federation of Indian Export Organisations, told AFP.
But Sahai also pointed out that India was hit with lower levies than regional manufacturing competition.
"Many countries which we compete with globally, including China, Indonesia, and Vietnam etc have been hit harder than us," he said.
"That opens up space for us to gain in terms of market share. But at the same time, if more countries retaliate and global trade gets hurt, this isn't good for anyone."
- 'Competitive advantage' -
India's pharmaceutical sector, which exported more than $8 billion of products to the United States in the 2024 fiscal year, also emerged unscathed -- with drugs exempt from its reciprocal tariff move.
Indian Pharmaceutical Alliance secretary general Sudarshan Jain said that showed "the critical role of cost-effective, life-saving generic medicines in public health, economic stability, and national security".
The Nifty Pharma index was up over 2.5 percent in morning trading.
New Delhi is also in the process of negotiating the first tranche of a bilateral trade agreement with Washington.
Experts say that India's future policy responses should also take into account China's next steps.
In the run-up to Trump's "Liberation Day" announcement, India sought to reduce trade tensions with Washington by cutting tariffs on some products including high-end motorcycles and whisky.
"Asia has been hit much more than India on tariffs," Madhavi Arora, chief economist at Emkay Global Financial Services, said.
"China's survival response to the massive tariff blow will matter for India, amid its excess industrial capacity and dumping in the world/Asian markets."
But Global Trade Research Initiative, a New Delhi-based think tank, said the tariff shakeup "presents an opportunity for India to strengthen its position in global trade and manufacturing".
It added that India had been handed a "competitive advantage" in several key sectors, highlighting textiles and garments with high tariffs slapped on Chinese and Bangladeshi rivals.