Win some, lose some. That just about sums up India’s takeaway from, on the one hand, US President Donald Trump’s self-congratulatory announcement of an India-Paki stan ceasefire and his 90-day pause of America’s tariff war with rival superpower China, and, on the other hand, the tamping down of reciprocal tariffs by the Big 2. The first development provided a huge tailwind to the Indian stock market which had been shed ding points in the wake of Operation ‘Sindoor’, while the second has dashed the Indian government’s and India Inc’s hopes of filling the exports vacuum created by the short-lived tussle of sky-high counter-tariffs between the US and China.

Realising the foolish and mutually detrimental nature of their tariff tussle, the world’s two largest economies brought some realism to the negotiating table and have agreed to bring down their counter-tariff rates to sane levels. In what is apparently a win-win situation for both biggies, it has been decided to fix a 30 per cent tariff on Chinese goods entering the US and a 10 per cent tariff on American goods finding their way to China. The latest negotiations have left both countries satisfied and vindicated about their respective stands.

Unfortunately, India’s hopes of capitalising on the tariff tussle between the Big 2 have been dashed before any changes happened on the ground. India Inc, as well as New Delhi, had started dreaming of a tremendous boost to our manufacturing sector on account of the US-China trade war. The Modi government was likely visualising a huge kickstart to the Prime Minister’s hitherto stuttering ‘Make in India’ initiative.

But India’s hopes of an export edge in sectors such as textiles, pharmaceuticals and electronics have been dashed by the latest US-China tariff deal. India Inc’s hopes that the much-hyped trade war between the Big 2 would lead to a windfall for Indian exporters have been dashed – at least for the foreseeable future. This in turn has cast a cloud over India’s role in the global supply chain. It was just a month ago — in the first fortnight of April, to be exact – that Indian exporters were jubilating at the thought that a bruising tariff war involving tariff rates of 125 per cent to 150 per cent, and even higher, between the US and China would open a pathway for India to capture a sizeable slice of Beijing’s export pie. That euphoria has now evaporated, and observers agree with the wisdom of hindsight that India Inc’s optimism was, to put it mildly, premature.

To be fair, though, India Inc’s hopes of a trade windfall were not all fantasy. Consider the fact that in 2024, the US imported chemicals, including APIs (active pharmaceutical ingredients) worth $ 165.5 billion. Of this, China commanded a 10 per cent share in reagents and an aggregate 71.8 per cent of imports. India, with a cost-effective manufactur ing ecosystem, was well-positioned to fill the gap.

Textiles was another promising sector. US imports in this category were $ 16.6 billion, with China accounting for 15.3 per cent of the pie. India was ready to step in here with its ‘Make in India’ and PLI initiatives.

But now, with the tariff advantage over China vanishing, India Inc is left dreaming of what might have been. And though Prime Minister Modi and President Trump are ‘bear hug buddies, we would be day-dreaming to expect any tariff favours from the US.

On the manufacturing front, India was a key contender for the much-hyped ‘China +1’ strategy of global, particularly American, companies who sought to reduce their depen dence on China by diversifying their supply chains. But this hope too may have been given a quiet burial with Washington and Beijing warming to each other on the tariff front.

As a matter of fact, Chinese companies too had started thinking of shifting production to India to dodge the earlier sky-high tariffs that the US had threatened to impose on China. But with that fear dissipating, Chinese companies may not show any interest in setting up manufacturing plants in India.

Now that the hopes of capturing a sizeable slice of Beijing’s US export pie have evapo rated, India should strive to make the best of the situation. It should strive for a trade agreement with the US which can fix a blanket 10 per cent import duty on Indian goods entering the US, which will – hopefully — skirt President Trump’s current prescription of a 26 per cent tariff on our exports to America.