Trade Wars and Diplomacy: United States Tariffs and India’s Multilateral Challenge and Economic Outlook

Abstract

This​‍​‌‍​‍‌​‍​ ‌‍​‍‌article examines the impact of U.S. tariffs on the Indian economy and how India has been strategically responding to the situation. This study adopted an integrated methods approach, first conducting a quantitative analysis of trade data (2015-2022) and then a qualitative assessment of policy responses. The results indicate, among other things, that the U.S. protectionist measures have been the main culprits in the damage to India’s export sectors, as evidenced by a paired t-test showing that the average value of Indian export products declined by $106.7 million per affected product category (p < 0.05). Thus, India has turned such challenges into opportunities as it has strategically broadened its trade relations with partners like the Netherlands (22.8% CAGR) and Brazil (22.1% CAGR) and is making the most of the “China+1” supply chain shift. Indeed, export concentration, as measured by the HHI, dropped by 14.8%. Thus, through active multilateral engagement and domestic reforms, India is not only overcoming trade war challenges but is also becoming more economically resilient and competitive in the global trading​‍​‌‍​‍.