With Donald Trump reviewing existing US trade and tariff policies to consider reciprocal tariffs, here are key insights into India’s relative vulnerability and potential impact. India in US import rankings According to data from Emkay Research, India ranked as the 10th largest source of US imports in 2024, with a total trade value of $91 billion. The top three sources were Mexico ($510 billion), China ($463 billion), and Canada ($422 billion). India’s import duties on US goods A significant portion of India’s imports from the US face relatively low tariffs. In FY24, around 82% of these imports had tariffs between 0% and 10%, while about 15% fell within the 10-20% range. Only 3% of imports were subject to tariffs exceeding 20%. Risk of India’s high tariffs Madhavi Arora, Chief Economist at Emkay Research, notes that India has some of the highest tariffs on US imports. If reciprocal tariffs are imposed, India could face disproportionate economic strain, particularly in sectors such as intermediate goods, which are crucial for domestic manufacturing. Sectors at risk from tariff shifts Arora highlights that if reciprocal tariffs are imposed, chemicals, automobiles, textiles, clothing, and footwear would be among the worst-hit sectors. India’s US trade deficit in context Despite these concerns, the US trade deficit with India was $49 billion in 2024, significantly lower than China ($319 billion), Mexico ($176 billion), and Vietnam ($129 billion). This suggests that countries with larger deficits may face greater scrutiny from the Trump administration. Trade Talks – policy negotiation outlook Arora believes, “Given that the Trump administration has only announced a review at present, with April being the earliest by when these tariffs could be implemented, it looks like a classic Trump move: announce and negotiate.” She suggests that Prime Minister Narendra Modi may be able to secure favourable deals, but this may involve lowering import duties and increasing Indian purchases of US goods, especially in the defence and energy sectors. “PM Modi may be able to wangle some exceptions/favourable deals, but that would likely entail lowering import duties for some products, as well as higher Indian purchases of US goods, with defence and energy being prime sectors,” she adds.Original Article