Trump's Trade Tactics: Will India make the 'import' switch?

As Donald Trump returns to the White House, the Indian government is reviewing its import strategy to see if certain items currently imported from other countries can instead be sourced from the US, ToI reported. This move aims to improve the trade balance between the two nations.

Trump has expressed concerns about India's high import tariffs, calling them a barrier to boosting American exports. He has previously referred to India as the “tariff king.” Sources suggest the government is looking to address some of these issues while exploring the possibility of switching suppliers for certain imports.

Unlike China, the government believes the Trump administration might be more willing to work with India on a mutually beneficial trade deal. During Trump’s first term, some difficult trade issues were resolved, such as India increasing imports of US crude oil, defense equipment, and airplanes.


India has a significant trade surplus with the US, its second-largest trading partner after China. Between April and October 2024, the trade surplus was over $21 billion. In the previous fiscal year, India’s trade surplus with the US stood at $35 billion, with exports totaling $77.5 billion.

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However, government officials emphasize that trade figures often ignore the role of services. Despite pressures on visas, particularly for skilled professionals, India is seen as a valuable source of talent. The rise of global capability centers (GCCs) highlights India’s importance in providing skilled workers.

Additionally, the government has identified sectors like pharmaceuticals and electronics as areas where Indian exports could grow, partly due to increased US tariffs on Chinese imports. Security restrictions on China may also position India as a more attractive trade partner.

For this opportunity to materialize, India will need to ramp up its production capacity. The government is encouraging the private sector to step up while creating a supportive ecosystem to make India a major manufacturing hub for these products.

(with ToI inputs)