Donald Trump’s controversial tariff policies are creating a mixed impact across India’s real estate sectors, with commercial properties showing resilience while residential markets face increasing uncertainty. The 26% ‘reciprocal tariffs’ on Indian exports to the US—currently paused at a 10% baseline for 90 days—have left developers, investors, and companies navigating an unpredictable economic terrain. Despite initial apprehension, India’s office market demonstrated remarkable strength in Q1 2025, with gross absorption reaching 15.9 million square feet across six major cities—a 15% year-over-year growth according to Colliers and Real Estate Intelligence Service data.

Notably, 46% of this leasing activity came from IT services, Global Capability Centers (GCCs), and technology firms expanding their offshore operations. “There is no proposal to tax services by the US government yet, and we do not know how the tax on goods will pan out after the 90-day pause,” explained Anurag Mathur, CEO of Savills India.

Whilst we do not foresee any impact to office absorption, including GCC expansion, at this stage, just the uncertainty and subdued sentiment could slow down expansion and impact the industry. The combined effect of stricter US visa policies and steep tariffs on China (reaching 245%) has paradoxically strengthened India’s position as a preferred destination for back-office, IT, R&D, and analytics operations.

Industry experts note that restrictions on talent mobility are compelling companies to redistribute their global workforce, with India emerging as the default choice due to cost advantages and talent availability. This evolving landscape has transformed offshore operations from tactical arrangements to strategic imperatives. Banking, healthcare IT, and enterprise technology companies are increasingly establishing or expanding their Indian presence for engineering, analytics, cybersecurity, and back-end functions. CBRE predicts GCCs will account for 35-40% of total office space absorption across major Indian cities in 2025, with North American firms continuing to drive this trend. However, while commercial real estate remains relatively stable, the residential sector shows signs of correction in certain markets as global trade tensions create hesitation among homebuyers.

Industry observers note that Q2 2025 looks particularly uncertain, with decision-making largely on hold as stakeholders await clarity on the long-term implications of these tariff policies. If these global trade tensions persist throughout 2025, experts anticipate potential impacts on trade-linked employment, capital inflows, and infrastructure development across India—factors that could reshape the country’s real estate landscape for years to come.

Knowledge Source : https://economictimes.indiatimes.com/industry/services/property-/-cstruction/trumps-tariff-tremors-put-indian-realty-market-on-uneven-ground/articleshow/120398619.cms