Similar to U.S. President Donald Trump¡¯s threatened 25% tariffs on Japanese imports, his 50% tariffs on Indian imports, which took effect on Wednesday, will likely come down as U.S.-India trade negotiations progress.
Nevertheless, the Trump tariffs, and the substantial hit Indian manufacturing will take as a result, provide an opportunity for India to ¡°pivot¡± toward Asia ¡ª to borrow a phrase from former U.S. President Barack Obama ¡ª and away from its overreliance on the U.S. as its most important export market.
Trump¡¯s tariffs come at a time when Indian exports to the U.S. are growing rapidly, comprising 18% of all exports and 2.2% of the nation¡¯s gross domestic product. Historically, India has never been a treaty ally of the U.S., but it has maintained a strong relationship with America. New Delhi¡¯s ties with Washington became especially close during the presidencies of George W. Bush and Barack Obama, and they remained strong during Trump¡¯s first term and continued under Joe Biden.
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