Indian Firms Prioritize Domestic Market Amidst Trade Wars

Mumbai, May 29 (PTI) The ongoing tariff wars seem to have triggered a rethink among Indian businesses, and a growing number of entities are shifting focus to prioritize domestic markets, a survey of 250 entities released on Thursday said.

"Indian firms are rethinking their trade strategies to adapt to evolving market dynamics, with 87 per cent of firms pivoting their focus toward domestic clients, prioritizing local customer needs to ensure stability," the survey of entities having turnovers between USD 50 million-2 billion, said.

Over three-fourths of the respondents said that they are reassessing their long-term business strategies in response to changes in trade policies, as per the survey conducted by foreign lender HSBC.

Four-fifths of the respondents said they are exercising greater caution in expansion and investment decisions due to trade-related uncertainties.


US President Donald Trump has taken a slew of measures on the trade policies front to protect domestic interests, which are different from preferences from administrations in the past.

Indian firms are recalibrating their focus toward domestic markets and actively exploring new regions to mitigate risks and seize emerging opportunities, HSBC India's head of global trade solutions Runa Bakshi said.

The survey said 91 per cent of Indian firms are focusing on entering new markets, particularly in regions less affected by trade disruptions, while 82 per cent are choosing to exit high-risk markets impacted by trade uncertainty, and 87 per cent are exploring mergers and acquisitions to bolster their market position or strengthen supply chains through strategic partnerships.

It said 83 per cent of Indian firms as against 73 per cent average in the global survey anticipate a substantial rise in cost in the next six months due to trade uncertainties, and over half of these firms are concerned by the escalating expenses driven by tariffs and other trade-related factors.