Will India tariff woes be Trumped by RBI response?

tariff rate of 10% on countries across the globe, big and small. From the imposed reciprocal tariff rates, Asia and Europe on the higher end of the tariff scale. In Asia, the highest rate of reciprocal tariff is on Cambodia and Vietnam. India faces reciprocal tariffs of 27% while China faces reciprocal tariffs of 34%. Indonesia and Taiwan are facing higher tariffs than India at 32%. Mexico and Canada are exempted from new tariffs, while the previously announced 25% tariff on autos is to take effect from April 3, 2025. Reciprocal tariffs to the equivalent of ~50% of combined estimated rate of tariff and non-tariff barriers faced by US exports in the respective countries have been announced. A retaliation might put the global economy in a trade war. The efforts to reach a bilateral agreement between India-USA provides hope and scope to limit the impact of these reciprocal tariffs levied on India.

Source: Reciprocal Tariffs, White House

If these tariffs were to come into effect in their existing form, starting April 9, 2025, it would be the onset of a dark hour for global growth and free trade. Although there is uncertainty around the intensity of impact on each country and sectors, there is a clear consensus that the tariff hike implications are negative for global growth. While countries on the receiving end of the tariffs will be worried about economic growth, especially export focused nations such as China, Vietnam, the USA might be in for a double whammy of tariff-led higher prices and subdued economic growth;