As Donald Trump is sworn in as the 47th President of the United States, India faces a series of critical challenges and decisions. Trump’s “America First” mantra, coupled with his transactional approach to diplomacy, signals potential turbulence in India’s trade relations and geopolitical positioning.
Trade Dependencies and Tariffs: A Looming Challenge

India’s trade relationship with the US is significant but fraught with potential risks. In 2023-24, India exported $77.5 billion worth of goods to the US, accounting for 18% of its total exports. This heavy reliance on the American market makes India vulnerable to policy shifts under a Trump administration.
Trump’s previous presidency saw tariffs imposed on Indian goods and the revocation of preferential trade treatment under the Generalized System of Preferences (GSP). A similar approach this time could impact India’s economy, especially given the high tariff rates India imposes on alcohol, automobiles, and luxury goods, often exceeding 40%.
If India lowers its tariffs to appease the US, it may face demands for reciprocal concessions from other trading partners in Europe, East Asia, and the Gulf, complicating its trade negotiations.
Strategic Shifts: Energy and Technology Pressures
India’s reliance on cheap oil from Russia and Iran could also come under scrutiny. Trump’s push for American energy dominance, encapsulated in his “drill, baby, drill” slogan, may result in pressure on India to import more American crude and shale oil, potentially altering its energy trade dynamics.
On the technology front, tighter US visa norms under Trump could hit India’s IT sector, which often relies on “body shopping” engineers to Western markets. Indian firms will need to pivot toward hiring locals in their overseas operations and developing expertise in high-value areas such as AI, quantum computing, and fintech to remain competitive.
Geopolitical Balancing Act
India’s strategic position between the US and China places it in a precarious situation. The US views India as a vital partner in its efforts to counter China and establish alternative supply chains. However, India’s reluctance to adopt a strong anti-China stance—shared by Japan—has diluted the Quad’s effectiveness, with AUKUS (US, UK, and Australia) emerging as the primary counter-China alliance in the Indo-Pacific.
While India has made strides in attracting capital and boosting exports, it has lagged behind nations like Mexico and Vietnam in gaining a larger share of the US market. Over the past five years, Mexico’s exports to the US surged by $132 billion, while Vietnam’s rose 133% to $114.44 billion. In comparison, India’s exports increased by a relatively modest $83.77 billion, reflecting the challenges of capitalizing on “friendshoring.”
The Road Ahead for India
Trump’s return poses critical questions for India’s leadership:
- Balancing Alliances: Can India maintain its strategic autonomy, or will it need to align more openly with the US?
- Trade Negotiations: How can India safeguard its export market in the face of potential American tariffs and pressure?
- Geopolitical Costs: If India aligns more closely with the US, how will it impact its relationships with Russia, China, and the Gulf states?
India’s projected GDP growth of 6-7% and its industrial base position it as a key player in the global economy. However, navigating the complexities of Trump’s transactional diplomacy will require careful calibration of its trade, energy, and strategic policies.
As Trump begins his presidency, the decisions made on Raisina Hill will shape India’s economic and geopolitical trajectory for years to come.

Author: This news is edited by: Abhishek Verma, (Editor, CANON TIMES)
Authentic news.