Author name: Zoe Neiman

Author: Zoe Neiman, Research Intern India is widely recognised as a major economy, yet remains one of the most protectionist, having maintained high import tariffs long before Trump’s new trade measures. India’s average tariff rate for trading partners is among the highest for major economies, averaging 13.8% compared to the US’ 3.3%. Certain Indian sectors like agriculture, automobiles and electronics are protected by even steeper duties. India’s protectionism has historical roots in its post-independence strategy of economic self-reliance, shaped by fears of foreign domination, to safeguard domestic industries from hyper-scaled foreign competitors. However, in today’s globalised economy, such a defensive stance risks limiting India’s growth and competitiveness, signifying it is time to reconsider and reduce protectionist barriers. This enduring protectionism has drawn criticism from the Trump administration. He repeatedly cites examples such as the high import duty on Harley-Davidson motorcycles and strong trade barriers on Indian agriculture, arguing the US is being taken advantage of in trade deals. Trump characterises India as the ‘tariff king’, highlighting the disparity between US openness to imports and India’s restrictive barriers. His administration’s retaliatory tariffs were presented as corrective measures aimed at rebalancing trade relationships and pressuring India to reduce its protectionist policy, paving the way for a more reciprocal bilateral trading relationship. Why then, are the tariffs imposed on India so trivial in comparison to its competitors in the region? These tariffs serve to mask a wider calculated strategy, that of continuing Biden’s strategic partnership with India as a counter to China in the Indo-Pacific.  US Tariffs Strengthened Indian Competitiveness  At first glance, India appears to be hard-hit by the 26% US tariffs, particularly in sectors like textiles, electronics, and engineering. However, crucial exports such as pharmaceuticals, semiconductors, copper, and energy products remain untaxed. Pharmaceuticals, in particular, were spared due to their importance to the US, with 30% of Indian pharmaceutical exports directed to American markets. Agricultural exports are expected to remain stable or even grow, and India’s electronics and textiles sectors are advantageously positioned, as rival exporters like China (54-79%), Vietnam (46%) and Bangladesh (37%) face much steeper duties. India’s textiles sector is set to gain from the tariffs, as the US is already placed as India’s largest buyer accounting for $10 billion of India’s $36 billion exports in 2023-2024. Additionally, sectors dominated by China and Thailand, such as machinery, automobiles and toys, are vulnerable to tariff-driven supply chain shifts, presenting India with an opportunity to attract investment. Altogether, these subtleties reveal that rather than punishing India, Trump’s strategy strengthens Indian competitiveness, showing the hollowness of his ‘tariff king’ rhetoric.   Bipartisan Prioritisation of India  In 2017, Trump had shifted toward strategic alignment with India, reviving the Quad and placing India under Strategic Trade Authorisation Level 1, equal to NATO allies. Biden’s administration significantly expanded upon and institutionalised the US-India partnership, recognising India’s significance for the US’ wider ‘Free and Open Indo-Pacific’ strategy. Developments such as the iCET Initiative (Initiative on Critical and Emerging Technology), and expanding defence cooperation by increasing military interoperability, joint exercises and agreements like BECA and COMCASA solidified the comprehensive strategic partnership. Biden also elevated India’s role in the Quad and made US-India joint training the most frequent bilateral defence cooperation. Under Biden, the US became India’s largest trading partner, with US goods exports to India at $41.8 billion and Indian exports to the US at $87.4 billion in 2024. India’s trade deficit with the US stands at $45.7 billion (2024) with strong reciprocal trade, whilst it has reached $99.2 billion with China at the beginning of this year.    When analysing the current administration’s India policy, there is a continuation and development of this approach. Looking past Trump’s rhetoric, largely condemning the Biden administration in all policy areas, there is a sharpened strategic commitment to India. Through the expansion of defence cooperation, joint military exercises, promoting arms sales and the co-production of technology, Trump has continued the path set by Biden. Equally, in the economic sector, the tariffs imposed have not translated into a rupture of US-India relations. Rather, it has generated greater momentum for the US-India FTA, to further formalise US-India economic ties. During the 90-day pause set by the Trump administration on 9 April 2025, the US has prioritised bilateral trade negotiations with India, stating a comprehensive FTA will be reached in autumn 2025. Trump has also expressed intent to revive American manufacturing and reduce dependency on China, creating opportunities for India in tech, electronics and manufacturing. India’s manufacturing sector as a whole is not yet strong enough to compete with China. Infrastructure deficiencies, a complex regulatory environment and labour reforms, high input costs, and skilled labour shortages plague Indian manufacturing development, decreasing the likelihood of India maximising on the emerging shift away from Chinese manufacturing. Still, recent developments such as Apple’s decision to relocate all US iPhone production from China to India highlight a growing commitment to de-risking from Chinese supply chains and positioning India as a preferred alternative. Trump’s strategy will further initiatives like Biden’s iCET, continuing India’s inclusion in secure supply chains, albeit framed in terms of economic nationalism rather than cooperative globalisation.   The timing and framing of these tariffs serve two strategic purposes. First, they obscure the continuity between Trump and Biden’s approaches by packaging the policy in economic nationalist rhetoric for domestic political purposes, while quietly expanding cooperation in critical sectors. Second, by presenting the tariffs as part of a universal ‘fair trade’ framework, the US allows its strategic alignment with India, principally in countering China’s trade practices and Indo-Pacific aggression, to remain subtle yet effective. This positioning enables India to absorb foreign investment and supply chain shifts away from China and benefit from trade realignment, all while reinforcing the US-India relationship. In this way, Trump’s tariffs operate less as punitive measures and more as tools to reinforce a strategic partnership already cultivated under Biden, now advancing under a different guise.  Towards Shared Strategic Interests   Recent developments have further revealed this calibrated approach. Vice President Vance’s visit to India was presented