From Tariffs to Take-off: How India Can Turn Barriers into Global Wins

When Washington announces tariff hikes on Indian goods, the instinctive response back home is concern. concern. Exporters worry about shrinking margins, lobby groups prepare representations, and policymakers look for exemptions. For India, the challenge is clear: rather than treat tariffs as a dead end, can we reimagine them as a springboard for deeper global integration? On the surface, it appears to be a setback. Yet hidden within the disruption is a chance to reimagine strategy. Tariffs, harsh as they may be, can prompt Indian companies to step beyond their role as exporters and assume the identity of true global multinationals.

LESSONS HIDDEN IN HISTORY

History is instructive. In the 1980s, Japanese automakers like Toyota and Honda faced crippling US restrictions. Instead of retreating, they built factories in America, sidestepping tariffs while establishing a strong foothold in the consumer psyche. Today, Toyota often outsells General Motors on U.S. soil.

China, too, confronted repeated barriers in the 1990s. Rather than relying on single markets, its companies set up hubs across Asia, Africa, and Latin America. By the 2000s, Chinese firms had become resilient enough to weather tariff storms. India is at a similar crossroads. With US tariffs already hitting steel, aluminium, and chemicals and threats looming for textiles and pharma, the question is whether India Inc. can convert setbacks into strategy.

THE BIGGER PICTURE: RISK DIVERSIFICATION

Relying on one market is a vulnerability. By expanding abroad, Indian companies can diversify their risks and ascend the value chain. Exporting low-margin goods is a fragile business; owning global distribution networks ensures stability and pricing power. Global investors also show greater confidence in multinationals with international footprints. This could unlock better financing options for Indian firms.

THE ROADBLOCKS NOBODY TALKS ABOUT

Not all exporters can make the leap. SMEs may lack capital or the expertise to navigate. Here, government support through credit, bilateral investment treaties, and diplomatic facilitation can help. Yet the real hurdle is mindset. Indian businesses have been trained to think in terms of FOB (free-on-board) shipments from Indian ports. Expanding into overseas plants or acquisitions requires a shift in strategy and ambition. Not every firm will be ready.

THE OVERSEAS INVESTMENT PLAYBOOK

One of the most direct ways to turn tariffs into opportunity is for Indian firms to establish a physical presence overseas. This could take multiple forms:

· Manufacturing plants in tariff-friendly regions: Setting up units in countries with favourable trade access to the US, such as Mexico (through the USMCA agreement), Vietnam, or even within the US itself. Tata Steel’s European units or Mahindra’s tractor plant in the US show how presence abroad provides access despite trade walls.

· Joint ventures: Indian pharma companies have long collaborated with African partners to secure regulatory access.

· Greenfield investments: Infosys and Wipro’s US delivery centres demonstrate how being “local employers” strengthens brand credibility.

“Tariffs sting, but they also provoke change, They push businesses to innovate, diversify, and think beyond the safety net of domestic production.”

“Owning overseas brands and networks is not just about avoiding tariffs—it’s about resilience and pricing power.”