What's next for India’s International trade?

India has been focusing on trade with the United States since the beginning of this year. With the introduction of the tariffs, most traded goods are stuck in warehouses. This is due to the high tariffs being imposed by the United States of America on Indian goods, as we have potential ties with Russia on its crude.

From what is observed, the imposition of tariffs is mostly driven by personal relationships with the leaders of the nations, and secondly, it is more in line with the economic benefits the nations would likely receive in terms of resources that would help the US economy.

Indian foreign trade

For India, the share of trade is close to 128.9 billion USD in 2024. This is mostly comprised of services exports to the US market. As per the US records, the total imports from India account for 9153.4 million in USD for June 2025. This value is reduced from May by 280.5 million, as per US Census data. In terms of trade, India enjoys a trade surplus of close to 28.9 billion USD as per the latest estimates.

Sectors affected by US tariffs (related to India's International trade)

With the way the trade relations have panned out in terms of the trade negotiations, India has been affected immensely by higher tariffs from the United States of America. With 50 % tariffs applied for all the goods traded, the industries here, such as textiles, pharmaceuticals, gems and jewellery, and auto parts, have taken a major hit. Textiles and apparel have taken a disadvantage of close to 30 percent compared to the competing trading partners like Bangladesh and Vietnam. It has immensely affected the competitive export positioning in the global market, and specifically in the American market.

Prospects ahead….

Due to high U.S. tariffs, India's international trade, especially in key sectors, faces notable hurdles. However, India has the opportunity to renew global trade relations by pursuing multilateral and bilateral agreements, such as the upcoming FTA with the UK.  Over the year, we can expect more trade agreements to be signed and many new trade deals to be forged to take India’s growth story forward. These initiatives could open new markets and help mitigate the impact of U.S. tariffs. Leveraging technology and upskilling efforts will be essential for India to adapt, enhance global competitiveness, and create employment opportunities. This would help a nation like India, with immense potential and a young working population as well. What do you think is going to happen? Drop your views in the comments below!