The Future of India-US Trade: India’s Strategic Choices Against Trump’s Trade Pressures

Economic Policy
Written By Anisree Suresh

Image created using ChatGPT.

Published March 30, 2025

Executive Summary

The global economic landscape is in flux, with protectionism and a transactional approach to trade becoming increasingly prevalent. This presents a significant challenge for India, which has historically deployed tariffs and non-tariff barriers as key instruments of its trade policy. The Donald Trump administration's aggressive tariff measures further exacerbate these challenges, necessitating India's strategic and carefully calibrated response. 

India must undertake significant reforms to address challenges and unlock its full trade potential. This paper analyses India's policy options, recommending a gradual, phased liberalisation approach that incorporates targeted tariff reductions and a proactive pursuit of a Free Trade Agreement (FTA) with the US. This evolving landscape sets the stage for bold, strategic measures to promote India’s trade and further accelerate its journey toward economic growth. This paper proposes that India should lower tariffs on select items by the April 2, 2025, deadline for Trump's reciprocal tariff threats while pursuing a zero-for-zero-based Free Trade Agreement (FTA) in line with the September deadline.

Authors

Shikha Tomar

Shikha is a founder of a mental health start up called Ease and a PGP student at the Takshashila Institution.

Featured
Anupam Manur
Anupam Manur

Anupam Manur is an Assistant Professor at the Takshashila Institution. He was previously working as a Research Associate at the Indian Institute of Management – Bangalore, after completing his Masters in International Business (Economics) from Lancaster University.

Anisree Suresh
Anisree Suresh

Anisree Suresh works as a Research Associate in Geoeconomics at the Takshashila Institution. Her role involves exploring different aspects of international trade and India's geoeconomic interests. Prior to joining Takshashila, she served as a Senior Associate in International Relations and Strategic Engagement at the Centre for Public Policy Research (CPPR) in Kochi.

Anisree Suresh
Previous

Securing the Electronic Hardware Supply Chain: A Cost-Benefit Analysis Framework
Next

Public Survey | Technopolitik: How Should India Navigate Technology Geopolitics?