Trump’s trade war with India could lead to billions in losses, experts predict

India's potential annual losses from an increase in trade tariffs by the United States could reach $7 billion, according to analysts from the American firm City Research.

Their report, commissioned by The Times of India, outlines the likely consequences of the Trump administration's expected tightening of trade policies, per Caliber.Az.

Experts warn that Indian exports, particularly in pharmaceuticals, chemicals, jewellery, food products, and agriculture, will bear the brunt of the tariff hikes.

In 2024, India’s exports to the US amounted to $74 billion, including $8.5 billion in gemstones, $8 billion in pharmaceuticals, and $4 billion in petrochemicals.

In an effort to reduce trade tensions with the US, India has already made concessions, including slashing duties on US motorcycles from 100% to 50% and cutting the tariff on US liquor by 50%, down to 100%.

Earlier, President Trump signalled his intention to impose 100% customs tariffs on products from BRICS countries, including India, in response to efforts to move away from the US dollar in trade. Other countries such as Russia, China, South Africa, and Brazil, as well as the UAE, Egypt, Ethiopia, and Indonesia, may also face tariff hikes.

On February 13, President Trump signed an executive order directing his administration to propose "reciprocal tariffs" on US trading partners, which could significantly disrupt global trade. These tariffs, expected to be proposed by April, aim to match or offset existing tariffs and trade barriers imposed on U.S. goods by foreign nations.

Trump’s decision follows his longstanding criticism of unfair trade practices, claiming that countries like India, Japan, and the EU impose higher tariffs on US products while benefiting from lower tariffs on their exports to the US.

Although the tariffs may lead to short-term price increases, Trump insists they are necessary to correct trade imbalances. "Tariffs are great," he stated, emphasizing that the move would ultimately benefit American industries.

Trump’s reciprocal tariff strategy targets not only high duty rates but also non-tariff barriers, such as complicated regulations, value-added taxes, government subsidies, and currency manipulation — all of which, he argues, unfairly limit US exports.

Since taking office in January, Trump has already implemented aggressive trade measures, including imposing sweeping tariffs on steel and aluminium imports set to take effect on March 12. Additionally, he has levied a 10% tariff on Chinese goods and delayed tariffs on imports from Canada and Mexico for 30 days.

By Tamilla Hasanova