Donald Trump's Tariff War: How India's Key Imports And Exports Could Be Impacted - A Deep Dive

(MENAFN- Live Mint) India stands to face significant challenges and opportunities as US President Donald Trump's tariff threats loom over the BRICS nations, including India. While India was notably excluded from the latest wave of tariffs targeting Mexico, Canada, and China, the broader trend of the US' protectionist measures could still affect India's trade dynamics.

Challenges and opportunities for India

India faces both risks and opportunities: it could potentially deepen its trade ties with the US, particularly in defence and energy, or face disruptions from higher tariffs if tensions escalate . How India navigates this complex landscape will determine its economic standing.

Trump 's recent threat to impose 100 per cent tariffs on BRICS nations, including India, should they undermine the US dollar , adds a layer of uncertainty. He warned that any attempt by BRICS nations to create a rival currency would lead to such tariffs. This aggressive stance on currency challenges reflects Trump's broader trade strategy, which focuses on curbing trade imbalances and asserting the dominance of the US dollar. India , with its rising economic influence, stands at the intersection of these geopolitical and economic pressures.

India excluded from recent tariffs, but protectionism looms

The latest tariff announcements targeting Mexico, Canada and China reflect Trump 's continued focus on addressing the US trade deficit. While India has been excluded from this wave of tariffs, experts caution that India could still face repercussions if the US' protectionist trend continues.

India's trade with the US

India's merchandise exports to the US account for over 18 per cent of total exports. In 2023-24, India exported goods worth $77.5 billion to the US, more than the total exports to its next three largest markets combined. However, India's imports from the US are smaller, representing just over 6 per cent of US imports, leading to a rising trade deficit for the US.

Composition of India-US trade: Key imports and exports

India's imports from the US include petroleum crude, pearls, precious stones, electrical machinery, aircraft parts, and military equipment. Exports to the US primarily consist of petroleum products, pharmaceuticals, telecom instruments, and electronic components. The trade in defence equipment is also growing as India diversifies away from Russia.

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