US tariffs on China: India could get hurt most, says Crisil

As the US escalates tariffs on Chinese imports, Crisil warns this could lead to an increase in diverted exports to nations like India. While India-US trade has surged, India’s trade deficit with China has widened, highlighting stark imbalances despite overall trade growth.

Commerce and Industry Minister Piyush Goyal referred to US President-elect Donald Trump as a ‘friend of India’ and dismissed concerns about potential tariffs on Indian goods, emphasizing India’s improving ties with the US. Goyal also expressed India’s disappointment with the EU’s deforestation and other regulations, stating they are unfair and violate international principles.

Former chief economic adviser Arvind Subramanian said that India, particularly Tamil Nadu, is capitalising on the “China plus one” strategy to attract foreign direct investment. He highlighted India’s previous underperformance in integrating with global value chains, impacting exports and labor-intensive sectors.

India’s Commerce Minister Piyush Goyal expressed disappointment over the EU’s green trade regulations, including CBAM and EUDR, calling them unfair and unilateral. He emphasized the principle of common but differentiated responsibilities and India’s low per capita emissions during a meeting with his French counterpart, hoping for a resolution through continued engagement.

India’s trade with the US and China reached nearly $120 billion each in fiscal 2024. Trade with the US yielded a $35.3 billion surplus. Trade with China resulted in an $85.1 billion deficit. Exports to the US diversified, while exports to China stagnated. India aims to boost domestic manufacturing and reduce import reliance.

Russia and India achieved record-breaking bilateral trade of USD 66 billion in 2024. This represents a fivefold surge in five years. The countries aim for USD 100 billion in trade by 2030. Collaboration is expanding in sectors like railways, IT, and pharmaceuticals. Indian businesses have new opportunities in Russia. A proposed trade desk in Kolkata […]

Morgan Stanley’s analysis suggests India and Japan are relatively insulated from President-elect Trump’s tariff threats, with Japan particularly well-positioned. While India faces greater exposure, the impact on growth is estimated to be moderate. However, broader tariff implications for Asia remain a concern, emphasizing the need for diversified trade partnerships.

India’s increasing protectionist policies risk escalating trade tensions with the US, particularly in the booming e-commerce sector. Local retailers’ concerns about MNC dominance are prompting government intervention, but US retaliation could harm Indian exports and jobs. A balanced approach is crucial to protect local interests while fostering foreign investment and economic growth.

India is seeking assurances from the European Union that future non-tariff barriers won’t harm its interests during ongoing free trade agreement negotiations. India raised concerns about measures like the Carbon Border Adjustment Mechanism, emphasizing market access for goods, services, investment, and government procurement as key priorities.

India’s economy shows resilience amidst global uncertainties. Favorable monsoons boost agriculture, while services trade remains strong. However, weakening global demand and geopolitical tensions, including the Russia-Ukraine conflict, pose challenges to export growth and financial markets.