Budget 2025 Expectations: Trump, Trade & Tariff - What Will Be The Impact Of Trump 2.0 On Budget? PwC EXCLUSIVE

The Union Budget for 2025, is due to be presented by Nirmala Sitharaman on February 1 and Price Waterhouse & Co LLP has shared its budget expectations.

Despite a global slowdown, the Indian economy has grown sharply over the past few years. A large part of that has been due to prudent fiscal management and policy changes. But the GDP growth in the second quarter of FY24 has fallen to 5.4 per cent, due to industrial slowdown and a moderation in investment demand.

Multinational Professional Services Brand PricewaterhouseCoopers (PwC) India held a Pre-Budget Workshop and here are some of the key take-aways:

According to Pratik Jain, Partner and Brand Markets Leader North for PwC India, Trump 2.0 is being looked at very closely.

Picking up some data points from the Economic Survey which came in July, Sandeep Puri, Partner at PwC added that there was a number of $798 billion of exports out of Mexico to US and around $400 billion plus from Vietnam.

After scratching the surface it was understood that more of the assembly was being done in neighbouring countries of India to make exports to the US, which is the largest market now, Puri said.

In 2019 the corporate tax rate for new manufacturing came down to 15 per cent and it stayed fir six years. But there was no increase on it, which was expected as a lot of manufacturing moved from China but it went to Vietnam and Mexico.

There are additional concerns like tooling which may bring issues such as permanent establishment issues or a taxability issue for non-residents.

Currently, the United States is pushing back on some trade policies at an overall level, even before Trump has taken office, according to PwC experts and the Biden administration was supportive of them.

According to the experts, 200 odd Indian companies would get impacted by these trade policies, but if you look at outbound investments and the kind of outbound investments that are made, about 80 companies would be impacted.

On being asked whether or not India will wait for Trump 2.0, they said that knowing their policy deduction, "both during pillar one and pillar two," there was a pushback and US is the major trading partner.

Additionally, Anurag Sehgal, Managing Director at PwC said, "the government may come out with different slabs for various products depending on where it is placed in the value chain. Goods may be categorised as Value added/primary and raw material/Intermediary and accordingly slab rates may be fixed."

Largely, the expectations, around this time are uncertain as compared to what they were like during Trump's previous tenure.