Trade Turbulence: India’s Economic Journey Under U.S. Tariff Influence

Abstract

This paper explores the trade turbulence experienced by India due to U.S. tariff policies, particularly during Donald Trump’s presidency—from his first term (2017–2021) through the beginning of his second term in 2025. It analyses how the U.S. administration’s protectionist approach, aimed at reducing the trade deficit and safeguarding domestic industries, has influenced India’s economic journey. The study focuses on key sectors such as agriculture, manufacturing, and services to assess the effects of these tariffs on India’s export competitiveness, trade relations, and market access. The research highlights broader economic consequences, including shifts in trade patterns, changes in foreign direct investment (FDI), and India’s strategic responses to an evolving global trade landscape. While India’s exports in areas like textiles, pharmaceuticals, and IT services remained resilient, sectors such as steel, aluminum, and agriculture encountered significant setbacks. Nevertheless, India responded by diversifying its trade partnerships and exploring new market opportunities. The paper underscores the complexities of modern trade protectionism and offers insights into how emerging economies like India can navigate such external shocks while maintaining a trajectory of sustainable growth. This study provides a critical evaluation of India-U.S. trade dynamics and the enduring impact of tariff-driven disruptions on India’s economic prospects.