Dwelling on the economic implications for the current trade stalemate with the United Nations, not surprisingly, the impact on the US will be worse compared to India, with a lower GDP and higher inflation, and a weaker Dollar, said SBI Research in its latest report.
“Imposition of 25 per cent tariff on India with Penalty is a Bad Business Decision, but the mysterious forces of Global Supply Chain should auto-adjust and cushion the impact,” it said.
Indian businesses and Firms would do well to reinvigorate the “Made In India” as a hallmark of unquestionable Quality, the report suggested.
“Not surprisingly, US GDP, Inflation, and currency face a greater risk of downgrades compared to INDIA,” the report remarked.
The US is beginning to show signs of renewed inflationary pressure, driven by the pass-through effects of recent tariffs and a weaker dollar—particularly in import-sensitive sectors such as electronics, autos, and consumer durables
US inflation is expected to stay above the 2 per cent target through 2026, driven by supply-side effects of tariffs and exchange rate movements.
SBI Research highlighted that the total US imports from the rest of the world stood at approximately USD 3,266 billion. The newly announced average tariff rate is assumed to be 20 per cent across all imports. Thus, the tariff shock applies to nearly the entire import volume.
US tariffs are projected to cost the average US household about USD 2,400 in the short term, mainly due to higher prices from tariff-driven inflation, it highlighted.
Low-income families may lose around USD 1,300, nearly triple the relative burden compared to high earners, while high-income households could face losses of up to USD 5,000, though with less impact on their overall financial stability.
It is to be noted that the US share in India’s exports reached 20 per cent in FY25 and 22.4 per cent in FYTD 26. The top 15 items exported to the US accounted for 63 per cent of total exports.
Highlighting the crypto, the report said with a frenzy created around VDAs (Virtual Digital Assets), chiefly crypto currencies and stablecoins, the US administration’s agenda of making America the crypto capital increases the prospect of loss of confidence in the greenback, which itself appears destined to reach a tipping point as the reserve currency of the world, as US strives to reduce trade deficit withs its partner countries through trade deals.