Sustainability of Indian Commerce During the tariff War and It’s Future
Keywords:
Tariff War, Indian Commerce, Trade Diversification, US-India Trade, FTA, PLI, Atmanirbhar BharatAbstract
The imposition of sweeping US tariffs on Indian goods — escalating from 25% in April 2025 to a punitive 50% by August 2025 — triggered one of the most significant trade disruptions in modern India-US relations. This paper examines the sustainability of Indian commerce under this tariff regime, analysing the sectoral impacts across textiles, gems and jewellery, pharmaceuticals, electronics, and automotive components. It evaluates India’s policy responses, including market diversification, the landmark EU-India FTA (January 2026), the India-UK CETA, strategic autonomy posture, and domestic stimulus measures. Drawing on trade data from 2025–2026, the paper argues that while traditional export sectors have faced severe headwinds, India’s commerce has demonstrated a paradoxical resilience — driven by tariff-exempt electronics and pharmaceutical exports, rupee depreciation advantages, and aggressive FTA diplomacy. The paper concludes with a forward-looking framework for the future of Indian commerce, emphasising structural transformation, value-chain integration, and geopolitical hedging as pillars of long-term sustainability.
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