The trade war between the United States and China took a big jump on Tuesday when President Donald Trump put a massive 104% tariff on Chinese goods. This happened after China said they would “keep fighting” against these tariffs. Before this, Trump had already set a 34% tariff on China, and in return, Beijing—which is a major economic rival but also an important trading partner of the U.S.—hit back with its own 34% duties on American products, starting from Thursday.
This growing tariff fight between two of the world’s biggest economies has shaken up global markets. With the U.S. and China slapping these heavy 34% tariffs on each other’s goods, the impact is being felt everywhere, including in India. Now, the main question is whether India will get caught in the mess or turn this chaos into a golden chance to move forward. It all depends on how India plays its cards.
There are clear risks. Trade uncertainty tends to disrupt business, and India’s major export sectors—like textiles, jewellery, cashews, and engineering products—may be hit hard. The US is India’s second-biggest trading partner, and if American demand slows due to the tariffs, Indian exporters could feel the heat. Just recently, the Indian stock market took a sharp hit, wiping out over $160 billion in investor wealth. That’s a stark reminder of how interconnected the global economy is.
Supply chains are also vulnerable. Industries such as electronics, pharmaceuticals, and auto parts rely on smooth global trade links. If those get blocked or delayed because of the trade war, it could cause serious setbacks for Indian manufacturing.
But there’s another side to this story—and it could be India’s moment to shine. With the US and European Union imposing higher tariffs on imports from countries like China, Vietnam, and Bangladesh, India suddenly finds itself in a favorable position. This could be a rare opening. Indian exporters have the chance to fill the gap left by restricted Chinese goods.
Take electronics, for example. As Chinese smartphones face barriers in the US, international brands are scouting for alternatives, and India is already on their radar. Similarly, agricultural goods and textiles from India might see increased interest in markets looking to reduce their reliance on China. One analyst told Sputnik India that if India acts quickly, it could secure a bigger share of global trade in several key areas.
Of course, this potential comes with challenges. If the trade war leads American or Chinese companies to cut back on outsourcing, India’s IT and software exports might suffer. On top of that, there’s a bigger threat: China, facing excess stock, might start dumping its products—especially electronics and machinery—into markets like the UK, Germany, and the UAE, which are also important for Indian exports. Competing with such cheap goods could be an uphill battle for Indian producers.
So, where does this leave India? At a critical point—between risk and opportunity. The global trade tensions are serious, but they also offer India a unique chance to strengthen its position. For that, India must act decisively. The focus should be on boosting manufacturing capacity, resolving supply chain issues, and keeping production costs competitive. Cutting import duties on key raw materials could give local industries the boost they need. At the same time, signing trade agreements with partners like the UK and the EU could open valuable new doors.
This isn’t just about surviving the US-China trade war—it’s about using it as a stepping stone. India can raise its exports, create more jobs, and secure a stronger role in the global economy. This tariff standoff is a wake-up call. The only question is—will India respond with smart, bold action, or miss the moment? Time is ticking.
(Girish Linganna is a Defence and Aerospace Analyst based out of Bengaluru. He is also the Director of ADD Engineering Components, India, Pvt. Ltd, a subsidiary of ADD Engineering GmbH, Germany. The views expressed in this article are of the author only.)
