U.S. President Donald Trump has imposed a 26% reciprocal tariff on Indian imports as part of a broader global trade strategy. While this move presents challenges for India’s export sectors, several factors could still work in India’s favor.
Despite the tariff hike, India enjoys a comparative advantage over key Asian competitors. China faces a 34% tariff, Vietnam 46%, and Bangladesh 37%—making Indian exports relatively more attractive to U.S. buyers.
The pharmaceutical, semiconductor, copper, and energy sectors have been exempted from these tariffs, providing a crucial relief. India’s $9 billion pharmaceutical exports to the U.S. remain unaffected, securing a significant win for the industry.
This tariff situation could push India to renegotiate trade deals with the U.S., aiming for a more balanced trade relationship. By adjusting its own tariffs strategically, India has a chance to mitigate risks and strengthen economic ties with Washington.
While the new tariff poses immediate hurdles, India’s relatively lower duty rate, sector-specific exemptions, and diplomatic opportunities offer potential silver linings amid growing global trade tensions.
