Trump’s tariff chaos leaves Indian advertisers counting costs

US President Donald Trump has imposed a 26% tariff on Indian exports—sending tremors through the global economy and compelling brands in Mumbai and Bengaluru to reassess their marketing budgets.

On April 2, global markets experienced their worst single-day decline since the pandemic. Then came the chaos of April 7—a rolling crash that followed the sunrise across time zones, as stock markets from Tokyo to Zurich opened and sank under the weight of Washington’s whims. Goldman Sachs promptly raised the probability of a U.S. recession to 45%. Meanwhile, J.P. Morgan now places the chances of a global recession even higher, at 60%, highlighting fears of a worldwide economic slowdown sparked by aggressive trade policies. Amidst this financial upheaval, one thing remains certain in the advertising world: when profit margins are squeezed, media budgets bleed.

But India's not the only nation in the crosshairs. Apart from taxing all the world (allies, adversaries and uninhabited Atlantic islands alike), across the Pacific, Trump is engaged in a high-stakes economic standoff with China—threatening tariffs that could escalate duties on Chinese imports to an absurd 104%. This escalating tit-for-tat between the world's two largest economies isn’t just a bilateral spat; it’s a global economic tremor with aftershocks from Frankfurt to Mumbai.

As the fifth-largest economy, India isn't a bystander in this trade war; it’s collateral damage. “This kind of policy unpredictability creates marketing paralysis,” says a marketer who chose to remain anonymous, noting, “Budgets freeze because no one knows where the next hit is coming from.”

Rahul Vengalil, co-founder and CEO of tghr, agreed, saying, “Listed companies will definitely look at their bottom line and ad expenses will be the first likely casualty in that sense. A smart way to look at the next 6 months is that ad expense will be low.”

Trump's new tariff regime imposes a flat 26% (or 27%, depending on whom you ask) levy on Indian imports into the U.S.—with exceptions for pharmaceuticals but no leniency for sectors like automotive, electronics, textiles, FMCG, IT, retail, and gems.

Automotive: India’s automotive sector, which represents approximately one-third of annual advertising revenues, is bracing for impact. Automotive exports to the U.S. are forecasted to decline by over 12%, prompting major advertisers to reassess budgets. Shradha Agarwal, CEO of Grapes Worldwide, emphasizes the vulnerability: “Luxury auto brands with significant U.S. exports will likely trim their ad spends sharply. Domestic brands may weather this better, but ad spends will tighten significantly overall.” Automotive brands, traditionally heavy TV and digital advertisers, accounted for 13% of TV advertising spends in 2024 (as per the Dentsu e4m Report 2025), and this cutback could profoundly impact broadcasters.

Retail: The retail sector is also recalibrating its advertising plans. With heightened tariff pressures, retailers are strategically shifting from high-budget campaigns towards leaner digital-first initiatives. Agarwal notes, “Rather than expansive national campaigns, retailers will gravitate towards measurable, targeted digital spends and hyper-local content to maintain engagement without breaking the bank.” The retail sector contributed approximately 9% to India’s digital advertising pie, indicating a significant shift could reshape India's digital ad landscape.

Electronics: With electronics exports to the U.S. expected to shrink by 12%, this sector is reconsidering its international media strategies. A senior marketer observes, “Brands will likely divert international budgets toward robust domestic market initiatives, emphasizing digital efficiency and targeted local storytelling.” Vengalil adds, “It’s a good opportunity to look at cost-effective media options to sustain brand building, especially when competitors might be pulling back.”

FMCG: Fast-moving consumer goods brands, historically significant advertisers spending ?31,467 crore in 2024, face indirect impacts from broader economic uncertainty. Agarwal points out, “Brands are leaning towards performance marketing and regional digital content to forge stronger consumer connections affordably.” Rahul Vengalil further explains, “In times of uncertainty, brands naturally pivot towards ROI-driven marketing solutions, meaning FMCG ad strategies will become increasingly measured and cautious.” This realignment might dampen FMCG's previously aggressive TV spend growth, which reached 46% of total television ad spends in 2024, according to the Dentsu e4m Advertising Report.

IT: While IT exports are somewhat insulated from direct tariffs, anticipated reductions in U.S. client spending could still tighten the sector’s advertising budgets. Siddharth Dabhade, Chief Business Officer at Lemma, notes, “Marketing in IT will definitely come under scrutiny, though dramatic cuts aren’t expected yet.” However, industry analysts suggest cautious budget revisions in anticipation of softer global demand.

Textiles and Apparel: India’s textile sector is historically resilient. With tariff pressures looming, brands are expected to adopt more selective and cost-effective media strategies. A senior marketer says, “We’ll see scaled-down international branding campaigns, replaced by highly targeted and efficient domestic digital efforts. Overall spends will likely plateau or slightly contract.”

Gems and Jewellery: Traditionally heavy advertisers, this sector faces a predicted 15.3% drop in U.S. exports, compelling companies to significantly scale back their global media commitments. Industry experts anticipate shifts from lavish print and television campaigns towards more strategic, cost-controlled digital and regional media investments. Agarwal suggests that, “Brands will heavily pivot towards digital storytelling and influencer marketing, prioritizing cost-effective engagement.”

As these sector-specific shockwaves ripple outward, one truth remains stark: the global economy is increasingly beholden to the unpredictable whims of Trump and his cabal of billionaire advisers, who are inured to and cushioned from the vagaries of stock markets. Until policy clarity emerges from Washington—unlikely anytime soon—brands and marketers must navigate a landscape fraught with uncertainty. Indeed, uncertainty is all we have right now and brands must accept that uncertainty might be the only certainty for some time to come.