India likely to get more entangled in trade war amid supply chain shift: Mark Mobius

India’s growing role in global supply chains could increase its vulnerability to the ongoing trade war and external geopolitical uncertainties, according to a market expert, Mark Mobius. As several economies around the world grapple with shifting trade policies and tariff negotiations, India’s ambition to position itself as a major global supplier may come with higher exposure to the very trade tensions reshaping international commerce.

In a market environment already unsettled by inconsistent tariff signals from the U.S., India’s economic trajectory will likely intersect more deeply with global developments. Mobius noted that the current climate of uncertainty, particularly surrounding U.S. President Donald Trump’s tariff approach, could lead to heightened volatility for all emerging economies, including India.

This assessment was reported by ET Bureau, following a detailed interaction on the evolving global trade outlook.

Discussing the source of recent market turbulence, Mobius said, “You can expect more uncertainty in the market as Donald Trump is negotiating. He has got a pile of trade deals to sort out before his 90-day timeout on some tariffs runs out.”

When asked whether India could decouple from these global pressures, the analyst responded, “No. Everybody is in the same soup. Nobody can generally escape.”

He added that India will be entangled more in the global trade war because it will become a major supplier going forward.

He further remarked that such time-bound negotiations often come with added complexity, noting, “People who have worked on trade deals in the past say this kind of rushed timeline brings all sorts of complications and roadblocks. So, brace yourself, the market is likely to get even shakier.”

While recognising India’s potential to take over critical segments of the global supply chain from China, the analyst stressed the need for rapid reforms.

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“India is in a very good spot. It is in a position to take over the supply chain from China. But India has got to move quickly to liberalise the system for investment and also liberalise its trade system,” Mobius said.

He pointed out that the current bureaucratic hurdles involved in setting up businesses and importing essential machinery remain significant impediments.

“To export, companies must be able to import machinery and other components and, right now, that is very difficult because of the bureaucracy involved in setting up businesses in India,” he said.

According to him, easing these constraints is critical for attracting major global manufacturers.

He concluded his remark stating, “If they ease the system, it will encourage global players like Apple to set up their own factories and manufacture in India”.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)