Dun & Bradstreet Report: India Faces Margin Heat, Eyes Export Gains
India stands at a critical crossroads in global trade as geopolitical tensions and tariff realignments reshape international commerce. A recent whitepaper by Dun & Bradstreet, titled “Navigating the Fault Lines of Global Trade: An Indian Perspective”, highlights how Indian exporters are navigating a dual challenge: preserving profitability amid rising U.S. tariffs while capturing new export opportunities created by the strategic decoupling from China.
The United States has imposed its highest effective tariff rates since the 1930s, with 3,135 Indian product lines now subject to a universal 10% tariff and 343 falling under the elevated 25% Article 232 tariff, targeting strategic imports like steel and aluminum. These broad-based tariffs, introduced through the U.S. “Liberation Day” initiative and other executive actions, are part of a larger push to reduce dependency on Chinese supply chains. While these measures primarily target China, Indian exporters have also been caught in the ripple effects.
The report notes that the key threat Indian exporters face is no longer the loss of market access, but margin erosion. According to Dun & Bradstreet’s updated Tariff Vulnerability Score (TVS), sectors such as iron and steel articles (HS-73), machinery and electrical components (HS-84/85), and labor-intensive textiles are highly exposed due to thin margins, limited pricing power, and high buyer concentration in the U.S. market. For instance, the iron and steel category alone accounts for 21 of the top 100 most vulnerable product lines, with an average TVS of 1.40.
At the same time, India is well-positioned to gain from the reconfiguration of U.S. sourcing strategies. The whitepaper introduces a new Trade Opportunity Score (TOS) to identify 360 high-potential export products where India can replace China as a key supplier. These include specialty chemicals, microbial oils, pharma intermediates, home textiles, and high-margin intermediate goods. Products like 3-Quinuclidinol and hydrogenated microbial oils, where India has a strong global export base but limited U.S. market share, present significant growth avenues.
Dun & Bradstreet’s analysis maps products across four quadrants—Sweet Spots, High Risk–High Reward, Margin Traps, and Non-Core, based on their TVS and TOS. This approach allows businesses and policymakers to focus efforts on high-potential yet vulnerable segments, such as women’s apparel and bamboo boards, while supporting sectors facing heavy margin pressure with low export upside, like stainless steel tubes and hydraulic motors.
The report recommends several strategic interventions, including cost relief through input tax rebates and concessional financing, dynamic pricing mechanisms in contracts, and the development of certification hubs for critical sectors like agro and pharma. It also emphasizes the need for export infrastructure investments, particularly in compliance-ready clusters and cold-chain logistics.
India’s policy thrust through Production Linked Incentive (PLI) schemes has already gained momentum, with Rs 1.46 trillion in investments, Rs 12.5 trillion in production, and 9.5 million jobs generated. FDI inflows in manufacturing have jumped 69% over the past decade, with Q1 FY25 alone seeing a 26% year-on-year increase.
The whitepaper concludes that India must shift from reactive trade protectionism to proactive enablement. While the U.S. trade shift poses margin threats, it also creates strategic openings for India to strengthen its role in global value chains. With timely and targeted interventions, India has the opportunity not just to defend its export position, but to define its competitive edge in the evolving world trade order.
