US Tariffs: Indian Firms Brace for Uncertainty

Indian manufacturing firms are grappling with considerable uncertainty stemming from evolving US tariff policies, as highlighted by Triveni Turbine's Vice Chairman and MD, Nikhil Sawhney. Despite a reduction to a 10% tariff rate, which offers some relief, the lack of long-term policy clarity poses significant planning difficulties for companies managing global supply chains.

Sawhney emphasized that the limited duration of tariff periods, often around 150 days, makes it challenging for manufacturers to effectively plan sourcing and pricing strategies. This volatility creates operational risks, even though companies are familiar with previous tariff regimes and negotiated frameworks.

For businesses with manufacturing operations in both India and the US, such as Triveni Turbine, tariff changes directly impact internal pricing and transfer pricing strategies between these locations. Deciding how much of any tariff-related cost can be passed on to customers within these temporary policy windows is a key concern.

The United States continues to be a critical export destination and a key market for the long-term growth of Indian manufacturers. Maintaining competitiveness in both product technology and cost structures is essential for companies aiming to protect and expand their foothold in this market.

While service exports are currently excluded from these tariff discussions, the manufacturing sector faces ongoing adjustments. Sawhney expressed confidence in the resilience and adaptability of Indian entrepreneurs, noting their ability to thrive amidst such global uncertainties through operational flexibility.