Indian Startups’ Trump Tariff Strategy: How to Turn Crisis into Opportunity

Indian startups and MSMEs are facing a significant challenge as 55% of India's exports to the US. are now subject to increased tariffs, reducing profit margins for over 70,000 export-oriented businesses.

The tariff hike, resulting from India's continued purchase of Russian oil, has led major US. retailers like Amazon and Walmart to pause new orders, severely impacting sectors like textiles, gems, leather, chemicals, and seafood.

Anand Mahindra emphasizes the need for India to respond to this crisis with vision and resolve, suggesting improvements in business operations, tourism, and policy support for MSMEs as critical steps

Startups are encouraged to diversify their export markets, focusing on regions like the UAE and Indonesia to offset losses from US. tariffs.

An "India+1" manufacturing strategy is advised, where companies establish manufacturing bases in Gulf or ASEAN nations to maintain global market access without incurring US. duties.

Building direct-to-consumer channels is another strategy to reduce markups and mitigate tariff impacts, with companies like FabIndia and Tanishq already adopting this approach

Licensing and joint ventures for local production in the US. are recommended to bypass import duties while maintaining brand presence.

Investing in research and development and product innovation can help startups create high-value products that withstand tariff pressures and command stronger margins

Prime Minister Narendra Modi stands firm on not compromising agriculture or energy security, with Bilateral Trade Agreement talks underway to potentially resolve the issue by fall 2025

Entrepreneurs are encouraged to view this tariff crisis as a catalyst for transformation, much like the 1991 economic reforms, by reducing foreign dependence and fostering domestic resilience and innovation