India: A Bright Spot Amid Global Economic Challenges, Says JPMorgan

India’s strong domestic growth and minimal export reliance make it a global economic bright spot, JPMorgan’s Sjoerd Leenart said. Despite challenges like US tariffs and H-1B visa fees impacting trade and jobs, India’s skilled workforce continues to attract investment, with global firms expanding operations. JPMorgan highlighted India’s booming IPO market and its strategic importance, projecting resilience and long-term promise amid global uncertainties.

India's robust domestic growth and limited reliance on exports have positioned it as a standout performer in an otherwise turbulent global economic landscape, according to Sjoerd Leenart, JPMorgan Chase & Co.’s top Asia Pacific executive. Speaking at the bank’s annual India conference in Mumbai, Leenart described the country as a "bright spot" despite certain challenges.

“India has its share of issues—tariffs and the recent H-1B visa developments, for instance—but overall, it holds a strong position,” Leenart stated during an interview with Bloomberg Television. He expressed confidence that India could successfully navigate tariff-related challenges and emerge in a favorable position.

Rising Tariffs and Their Economic Impact

India's trade relationship with the United States has come under scrutiny in recent months. Concerns about India's defense and energy ties with Russia have prompted the US to label these dealings as a "threat to national security and foreign policy." Adding to these tensions, US President Donald Trump has threatened additional tariffs on nations implementing digital taxes.

Currently, India exports approximately $86.5 billion worth of goods annually to the US. However, the Global Trade Research Initiative (GTRI) highlights that $60.2 billion of these exports, or 66%, are now subject to a steep 50% tariff. Another $3.4 billion in auto parts is taxed at 25%, while $27.6 billion—largely pharmaceuticals, electronics, and petroleum products—remains exempt from duties.

Ajay Srivastava, founder of GTRI, estimates that exports from the heavily taxed sectors could plummet by 70%, reducing from $60.2 billion to just $18.6 billion. This significant dip could result in an overall 43% decline in exports to the US, placing hundreds of thousands of Indian jobs at risk, particularly in export-driven industries.

Visa Policy Shake-ups Add to Uncertainty

India has also felt the impact of the US doubling its 25% reciprocal levy in response to India's purchases of Russian oil. More recently, an executive order signed by Trump introduced a $100,000 entry fee for new H-1B visas, a policy that could disproportionately affect India, whose citizens account for over 70% of such visas.

While the long-term effects of this policy remain unclear, Leenart noted that the fee does not apply to existing H-1B visa holders, offering some reassurance. However, the new rules could inadvertently backfire. Industry leaders warn that higher fees and stricter immigration policies might compel US companies to accelerate their reliance on global capability centers in India, which offer access to a deep talent pool and significant cost savings.

India’s Growing Role in Global Operations

Global technology and financial firms are increasingly expanding their operations in India, leveraging the country’s skilled workforce. JPMorgan, for instance, has significantly grown its footprint in India, increasing its local workforce by 20% over the past two years. The bank operates across commercial and investment banking, asset management, payments, and securities services in the country, with corporate hubs in Mumbai, Bengaluru, and Hyderabad supporting global technology and business functions. These centers collectively employ over 55,000 people.

Leenart emphasized that India remains a strategic market for JPMorgan, though he refrained from commenting on how the new visa policies might impact the bank’s tech centers.

IPO Market Shines Bright

India’s financial markets are also witnessing a surge in activity, with an unprecedented number of initial public offerings (IPOs) in the pipeline. Anu Aiyengar, JPMorgan’s global head of advisory and M&A, highlighted that the firm is preparing more IPOs in India than in any other market. She expects the size of India’s IPO market this year to exceed last year’s levels significantly, reflecting the country’s growing prominence in global capital markets.

“India has become one of the world’s most active markets for new listings,” Aiyengar remarked, underscoring the opportunities for investors and companies alike.

A Promising Future

Despite global economic headwinds and policy challenges, India continues to attract the attention of multinational corporations and investors. Its strong domestic growth, expanding talent pool, and vibrant capital markets make it a key player in the global economy. For JPMorgan and other industry leaders, India remains not just a market of the present but one that holds immense promise for the future.