What Trump 2.0 means for India’s trade with US, China-West balancing act

India is expected to bear less of the brunt of looming import tariffs under a second Trump presidency in the United States because of its regional strategic significance to Washington, but New Delhi’s diplomatic balancing act with the West and other powers such as China may be sorely tested.

Trump, who initiated a trade war with China in his first term, has vowed to impose a 10 per cent tariff on imports from all countries, and 60 per cent duties on imports from China, with the results likely to ripple across global supply chains. He has also previously raised concerns about India’s high import tax.

India’s average import tariff is 17 per cent, but could reach 100 per cent or more on items such as specific types of vehicles and US whiskey.

But observers are optimistic that the returning US president would strike a compromise because of Delhi’s significance in the Indo-Pacific.

“He is likely to focus on China rather than India. With India, he will negotiate and use backchannels to settle any trade issues,” said Vivek Mishra, deputy director with the Observer Research Foundation’s Strategic Studies Programme.

But there are also concerns about what a second Trump term will mean for India since under his previous administration he had initiated a withdrawal of American troops from strife-torn Afghanistan that had raised security fears for Delhi.