As Donald Trump prepares for a possible return to the White House, experts warn that Indian exporters may face higher tariffs on key goods like automobiles, textiles, pharmaceuticals, and chemicals if his “America First” agenda takes shape.
Trade analysts say Trump’s administration may extend tariffs beyond China, potentially targeting India as well. Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), noted that Trump’s past remarks calling India a “tariff abuser” signal tough negotiations ahead. He warned that tariffs on Indian products could rise, making them less competitive in the U.S. market, although there could be some upside as India may benefit from a tougher U.S. stance on China.
India is the U.S.’s largest trading partner after China, with annual trade exceeding USD 190 billion. However, India is highly vulnerable to changes in U.S. immigration policies, especially H-1B visa rules, as over 80% of India’s IT export earnings come from the U.S. Stricter visa regulations could hurt Indian IT companies by raising costs and limiting growth potential.
The potential for higher tariffs on sectors such as electronics and automobiles, as well as increased protectionist measures, could further strain trade ties. According to trade experts, this could lead to new disputes over tariffs, with India possibly retaliating by imposing its own duties on U.S. exports. However, Trump’s desire to onshore manufacturing could also create new opportunities for Indian exporters in sectors like electronics and pharmaceuticals, provided India aligns closely with U.S. geopolitical and trade objectives.
India’s trade with the U.S. has been steadily growing, with merchandise exports rising 46% from USD 53.1 billion in FY 2020 to USD 77.5 billion in FY 2024. Services trade between the two countries has also surged, growing by over 30% in the same period. But experts caution that, under a second Trump administration, both countries may face challenges as protectionism and trade tensions escalate.
Trump’s policies will likely require India to balance its economic interests with geopolitical considerations, as the U.S. remains a key investor and trade partner.
