There is an ongoing debate around tariffs imposed by the US, but it’s important to understand that the US is mainly focusing these tariffs on goods, not services. Goods are physical products imported from countries like China, while services include things like IT support, which countries like India export to the US. The good news is that services have not been targeted under these new policies, so India’s IT exports remain unaffected.
US Spending Is More on Services
A clear trend has emerged in US consumer spending. Data shows that for the past several decades, personal consumption on goods in the US has been going down steadily. In contrast, spending on services is increasing every year. This means that even if the US puts tariffs on imported goods, it may not create a big issue for their economy because most of their money is spent on services, not goods. So the overall impact of such tariffs may be much smaller than expected.
Impact of Tariffs Likely to Be Limited
Many countries exporting goods to the US will only face a small increase in tariffs—maybe 5%, 10%, or at most 15%. The only uncertainty that remains is about how much tariff the US will finally impose on Chinese goods, which is still being discussed. But given that the goods segment is no longer the main focus of US consumption, this tariff move is not likely to have a very strong effect on their economy or global trade flows.
India Is Likely to Benefit
Rather than being affected negatively, India stands to benefit from these shifts. In fact, some good news has already started coming in. Reports show that at least 20 foreign companies have approached the Indian government with plans to set up operations in India. These companies are looking to invest through foreign direct investment (FDI), which will help create jobs and boost economic growth in India.
Conclusion: A Positive Outlook for India
To sum it up, the concerns around the US tariff policy may have been blown out of proportion. Markets are beginning to recognize that this change does not have a major long-term effect, at least not on countries like India. In fact, India may emerge as a net beneficiary of the shifting global trade patterns. It’s a moment of opportunity, not fear.
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