Can India’s economy tariff-proof its way for more growth?

The global landscape is already seeing a significant transformation, much of which has been brought on with Donald Trump back in the White House. 

Characterized by heightened American protectionism, strategic realignments, and a pronounced pivot toward the Indo-Pacific region, the new world order presents challenges and opportunities. India could emerge not merely as a resilient player amidst these changes but as a beacon for global investment, uniquely positioned to thrive in this evolving environment.

Trump’s renewed focus on the Indo-Pacific underscores India’s pivotal role in regional security and economic frameworks. The Quadrilateral Security Dialogue (Quad), comprising the US, India, Japan, and Australia, gains renewed significance under this Trump administration. India’s commitment to hosting the 2025 Quad summit in New Delhi exemplifies its dedication to fostering regional stability. Initiatives like the US-India Comprehensive Maritime Partnership and Cooperation Treaty (COMPACT), launched in February, further cement India’s status as a net security provider in the Indian Ocean, enhancing its strategic value on the global stage.

The 'China Plus One’ strategy, adopted by multinational corporations seeking to diversify supply chains, positions India as an alternative. Amazon Web Services’’ announcement to invest approximately $8.2 billion in Maharashtra underscores this trend, reflecting confidence in India’s burgeoning digital infrastructure.

India’s services sector has demonstrated robust growth, with the Purchasing Managers’ Index (PMI) rising to 59 in February 2025, up from 56.5 in January, indicating strong demand and a positive business outlook.  This resilience is bolstered by the Reserve Bank of India’s proactive monetary policies, including reducing the key repo rate to 6.25% in February, aimed at stimulating economic activity.

The National Infrastructure Pipeline (NIP), with an investment outlay of approximately $1.4 trillion, encompasses over 7,400 projects aimed at transforming the nation’s infrastructure landscape.  Key projects such as the Bengaluru–Chennai Expressway, partially operational since December 2024, and the Delhi–Meerut Regional Rapid Transit System (RRTS), with sections inaugurated in early 2025, exemplify this.

Additionally, the Kashi ropeway project in Varanasi, set to be India’s first public transport ropeway, is expected to commence operations by May, enhancing urban mobility and tourism infrastructure.  Such developments not only improve domestic connectivity but also signal to global investors India’s commitment to creating a conducive environment for business operations.

 The country’s IT sector continues to thrive, employing millions and contributing significantly to economic growth. Investments in emerging technologies such as AI and semiconductor manufacturing are on the rise, with initiatives aimed at positioning India as a global hub for tech innovation.

Collaborations with global tech giants and favorable government policies further enhance India’s appeal as a destination for technology investments.

India’s commitment to sustainable development is evident in its plans to expand key industries while adhering to environmental goals. For instance, the fashion and textile sector aims to triple its value to $350 billion by 2030, creating 2.1 million jobs and developing industrial mega-parks.

The strategy aligns with global sustainability targets, emphasizing renewable energy adoption and emission reductions.  Such initiatives demonstrate a balancing of economic expansion with environmental stewardship, a factor that resonates with socially conscious investors.

In the context of a shifting global order marked by protectionist policies and strategic realignments, India stands out as a beacon of opportunity. As the world navigates the complexities of 2025 and beyond, India’s emergence as a global investment destination underscores its pivotal role in shaping the future economic landscape.