Indian businesses and trade bodies are adopting a cautious stance following US President Donald Trump’s warning of reciprocal tariffs on Indian exports, according to a report by Business Standard,. While no official measures have been implemented yet, industries are closely monitoring developments and evaluating their next steps.
India recorded a $45 billion trade surplus with the US in 2024, ranking seventh among nations with a surplus in trade with Washington, as per Morgan Stanley. With such an imbalance, analysts speculate that Indian exports might face greater scrutiny if the US decides to act on its tariff threats.
Automobile components, steel, pharmaceuticals, and textiles are among the industries that could bear the brunt of any tariff imposition. India reportedly exported $6.79 billion worth of auto parts to the US in 2023-24, contributing significantly to total auto component exports of $21.2 billion. Meanwhile, auto component imports from the US were just $1.63 billion out of a total import value of $20.9 billion.
In the steel sector, concerns are less about direct US trade and more about potential spillover effects. Industry experts fear that tighter US trade policies on India could lead to a surge in Chinese steel dumping.
Currently, India's carbon steel exports to the US remain minimal due to pre-existing anti-dumping duties (ADD) and countervailing duties (CVD). Report further says the Indian Steel Association (ISA) has urged the Indian government to engage in diplomatic negotiations to remove these long-standing restrictions.
While uncertainties persist, analysts believe that India’s strong economic growth and strategic position could prevent any drastic deterioration in bilateral trade relations. Businesses are particularly attentive to how global geopolitical shifts might influence future trade policies.
Offering some reassurance, Commerce and Industry Minister Piyush Goyal recently pointed to a new bilateral trade agreement between India and the US as a positive step. Speaking at an industry event, he emphasised that the deal would enable both nations to build on their respective strengths and foster greater economic cooperation.
