How Does US China Trade Truce Affect India?
The US China trade truce for 90 days, announced on May 13, 2025, after Geneva talks, reduces US tariffs on Chinese goods from 145% to 30% and Chinese tariffs on US goods from 125% to 10%.
This de-escalation, following India-Pakistan ceasefire, spurred a “risk-on” rally in Indian equities.
However, it narrows India’s tariff advantage, potentially reducing US demand for Indian exports like chemicals and gems.
The China+1 strategy persists due to a 35% tariff differential, benefiting sectors like pharma CDMO (Syngene, Sai Life) and textiles (Welspun Living).
Reduced dumping risks aid commodity sectors, but footwear and cables face neutral to negative impacts.
Prolonged US policy uncertainty may shift investments to emerging markets, though volatility remains high.
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