Why Trump’s tariff shocks are testing India’s resilience?
Trump has doubled down on the on the tariff war that he's unleashed, pledging to impose similar levies on India and others from April 2. These reciprocal tariffs are in response to, according to him, high import taxes on American goods.
But, what makes India so vulnerable US tariff actions?
India rising trade surplus with the US
Recent research13 by Crisil shows that India’s merchandise trade with the US has doubled over the past two decades and the merchandise trade surplus has widened 9.8% on average annually over the past decade. India runs a merchandise trade surplus with the US, which amounted to $31.2 billion in calendar 2023. It also records a surplus in services trade, which stood at $2.4 billion in calendar 2023, taking the total trade surplus to $33.6 billion.
ALSO READ: India's economic growth pegged at 6.5% for FY26 despite Trump tariff threat: CRISIL
India's high tariffs on US
India’s tariffs on the US are also considerably higher than those imposed on the US by Malaysia (1.84%), Vietnam (2.85%) and China (7.13%)14, which could lead to further reciprocal tariffs by the US on India.
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