Question: With the US administration imposing a 25 percent tariff across the board, along with an additional 25 percent penalty on all Indian-origin goods, will the government be inclined to provide subsidies to exporters?
ANSWER: Instead of offering subsidies, the government is encouraging Indian exporters to build and promote brands, as branded products have a value that affluent American consumers might be willing to pay for. The brand promotion effort will be jointly conducted by export promotion councils and the India Brand Equity Foundation. Incentives may be provided under an employment-linked scheme for certain industries such as those dealing with leather and marine products. This could benefit both the domestic and export sectors by increasing production and reducing costs, thus mitigating the impact of the increased tariff rate. While some countries competing with India enjoy a lower tariff rate, they may not immediately be able to create adequate capacities to meet the shortfall, meaning Indian goods will continue to meet demand in the United States.
Lower credit costs due to an interest equalisation scheme for pre- and post-shipment export credit will also offset the tariff increase. Approximately 25 percent of goods exported will be exempt from tariffs. Pharmaceutical goods, petroleum products, and electronics are not covered by the higher tariff. Similarly, semiconductors, smartphones, and electronic products are unaffected. Some Indian manufacturers are likely to shift their production lines to the UAE, from where goods would be exported to the United States, attracting the baseline tariff rate of 10 percent.
Question: Are adequate steps being taken in India to develop the cloud market for storing data applications and infrastructure?
ANSWER: Indian companies in the private sector are gaining momentum to challenge larger global rivals in the rapidly growing cloud market. They are positioning themselves as affordable and secure alternatives, offering cost savings of 30 percent to 50 percent compared to large international cloud providers. Hyperscalers, which are large cloud providers with massive computing resources and related infrastructure, offer free cloud credits and startup support. Indian companies are swiftly building technical sophistication, security credentials, and operational scale to effectively compete with established global platforms.
The Indian government is encouraging companies to provide cloud solutions to ensure compliance and security of core applications and data, especially for enterprises in the banking, financial services, and insurance sectors. Global hyperscalers have expanded their presence in India by partnering with mobile phone operators to develop affordable cloud-based solutions. These are widely used by startups and small and medium enterprises, which have been slow to move to sovereign cloud due to high costs and risks associated with migrating applications, which are time-consuming and cause business disruptions. Currently, the cloud market revenue in India stands at $8.3 billion.
HP Ranina is a practising lawyer, specialising in corporate and tax laws of India.
Question: Gold prices have surged in India over the last year, as well as internationally. Will this affect the purchase of gold ornaments, which will be in demand during festive and wedding seasons?
ANSWER: The demand for gold is indeed muted due to rising prices, as evidenced by the figures for the first quarter of April-June of this financial year. According to estimates by the World Gold Council, the rising gold prices have impacted jewellery consumption, with demand falling by 17 percent year-on-year to around 89 tonnes in this quarter. However, according to their estimate, the high gold prices have boosted investment demand, which saw an increase of 7 percent year-on-year. Thus, there seems to be a strategic commitment among investors to purchase gold as a long-term store of value.
The projected demand for the current year is estimated at 600 to 700 tonnes. Gold prices have been highly volatile due to multiple factors, including geopolitical uncertainties, and the price of the metal in India crossed 100,000 for 10 grams on April 22, 2025, though it has subsequently decreased. Gold recycling has remained at a modest figure of 1 percent, indicating that consumers and investors are holding onto their assets with confidence in its true intrinsic value.
HP Ranina is a practising lawyer, specialising in corporate and fiscal laws of India.
