ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Implications of US’s Trade Policy on India

Minimising Damage and Maximising Opportunities

The resurgence of United States trade protectionism under the second Trump administration presents challenges and opportunities for India’s trade and investment landscape. We analyse the implications of the proposed reciprocal tariffs by the US at the HS 2, HS 4, and HS 6 levels. Further, the paper evaluates India’s export competitiveness, sectoral vulnerabilities, and potential gains in merchandise trade vis-à-vis India’s competitors in US markets, mainly focusing on the US’s targeted tariffs on China, Canada, and Mexico. The findings offer insights for India’s trade negotiations and strategies to strengthen India’s position in the rapidly evolving global trade environment.

 

Views are personal.

The authors thank Amit Verma, Jyotika Nagavanshi, Pooja Teotia, Apica Sharma, Salome Sara Philips, Riya Jindal, Rojan Joshi and Manuj Joshi for their research inputs while preparing this paper. 

 

 

The “America First” trade strategy under the Trump administration, which emphasises heightened protectionism, broader tariffs, and national security-driven trade restrictions, marks a fundamental shift in the international trade landscape. Unlike Trump 1.0 (2017–21), which imposed tariffs under Sections 232 and 301 primarily targeting steel, aluminium, and Chinese goods, Trump 2.0 is using the International Emergency Economic Powers Act, which grants a broader increase in tariffs on imports from major trading partners such as China, Mexico, Canada, and India. The evolving trade policies of the United States (US) will significantly impact global trade dynamics and influence the composition of US imports. Shifts in supply chains due to tariff measures and trade tensions will have significant realignments in sourcing patterns, benefiting some countries while constraining others. In this context, understanding India’s position within the broader US import landscape is crucial for assessing its competitive standing and identifying growth opportunities.

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