Economic Impact of U.S. Tariffs on the Indian Economy A Sectoral and Policy Analysis (2010–2025)

The imposition of tariffs by the United States has become a significant factor affecting global trade dynamics, particularly in emerging economies such as India. Tiwari (2025) states that between 2010 and 2025, India's export-driven sectors, including steel, textiles, pharmaceuticals, and IT services, were directly impacted by a series of tariff measures, particularly during and after the US-China trade war, as well as under protectionist policies. These tariffs sometimes used to protect American industries, have disrupted the supply chain, increased the cost of Indian exports, and caused uncertainty in bilateral trade relations. Furthermore, the impact of global events, including the COVID-19 pandemic and other geopolitical tensions, highlighted the trade environment. India has responded by retaliating against the US tariff of $7.6 billion, implementing domestic industrial support policies, and actively participating in multilateral trade negotiations (Ghosh 2025). Between 2010 and 2025, several export-driven Indian sectors—steel, textiles, pharmaceuticals, and IT services—experienced economic disruptions due to heightened U.S. tariffs. This study employs a mixed-method approach combining macroeconomic data, firm-level surveys, and qualitative policy analysis to examine the economic and sectoral impacts of U.S. tariffs on India. Findings suggest that tariffs have reduced India’s export competitiveness, disrupted supply chains, and caused GDP losses ranging from 0.1% to 0.6% annually. Nonetheless, India’s countermeasures—such as the Production-Linked Incentive (PLI) scheme, Make in India, and strategic trade diversification—partly offset these negative effects.