PwC suggests IDEA framework for India to navigate US tariff uncertainties

Global consultancy firm PwC has suggested IDEA (Invest, Diversify, Express, stay Aware) Framework for Indian businesses to navigate trade uncertainties following the decision by the US administration to impose reciprocal tariff.

Since the United States (US) presidential elections in November 2024, global trade dynamics have shifted significantly. The Donald Trump administration has already implemented several tariff measures impacting major economies. The reciprocal tariff, which will impact India, is scheduled to take effect on April 2. 

According to PwC report, the evolving US trade policies, including tariff realignments and other measures, require Indian businesses to develop a long-term resilience strategy.

The IDEA Framework provides a structured approach to navigate trade uncertainties and leverage emerging opportunities, it said.

Under the Invest Framework, PwC suggested that businesses should put in money for technology upgradation and AI-driven supply chain solutions.

To minimize risks from trade restrictions, PwC suggested a 'diversify' strategy so that businesses explore new export markets and reduce dependence on a single source of raw materials or single suppliers.

Identifying alternative markets can help businesses mitigate losses from US tariff hikes. It also suggested ensuring multiple points of procuring raw materials and components from multiple countries, alongside multiple markets to ensure resilience against geopolitical disruptions.

PwC also suggested that the industry should promptly 'express' their concern to the government and propose actionable measures such as tariff relief, trade deals, or sector-specific incentives.

Under the 'stay aware' framework, PwC suggested the domestic industry must adapt strategies dynamically to ensure minimized negative impact and tap into created opportunities.