In
the shifting sands of global geopolitics, few events have reshaped
international trade dynamics as profoundly as the U.S.-China tariff war
unleashed during Donald Trump’s presidency. Framed as a measure to correct
"unfair trade practices," Trump’s tariffs on Chinese goods—and
China’s retaliatory levies—have sparked a prolonged economic confrontation
between the world’s two largest economies. For India, the fallout has been both
a warning and an opportunity.
At
the heart of the U.S.-China trade war lies a mix of protectionism, geopolitical
maneuvering, and economic recalibration. The United States, under Trump,
imposed tariffs on hundreds of billions of dollars’ worth of Chinese goods,
aiming to shrink the ballooning trade deficit and push back against allegations
of intellectual property theft and state-sponsored industrial overreach. China
responded in kind, taxing American agricultural goods, machinery, and more. The
result was a global trade system under stress, with supply chains disrupted and
investor confidence shaken.
But
amid the turbulence, India found itself at a potential inflection point.
Opportunity
in Realignment
As
global corporations began seeking alternatives to China—often dubbed the
"China Plus One" strategy—India emerged as a natural contender. With
its large labor force, improving infrastructure, and a government eager to
attract foreign direct investment (FDI), India was well-positioned to absorb part
of the manufacturing and export load previously monopolized by China.
Sectors
such as electronics, pharmaceuticals, and textiles, traditionally dominated by
Chinese exporters, witnessed increased interest in Indian capacity. Companies
like Apple and Samsung began expanding production in India. Additionally, the
Indian government’s initiatives such as “Make in India,” Production Linked
Incentive (PLI) schemes, and a renewed focus on ease of doing business further
complemented this geopolitical window.
Trade
Diversion and Export Prospects
The
tariff war also opened doors for Indian exporters. As U.S. buyers looked to
diversify away from Chinese suppliers, Indian goods—from chemicals to
engineering products—became attractive alternatives. Similarly, in sectors
where the U.S. imposed duties on Chinese inputs (like machinery or intermediate
goods), Indian producers found themselves better placed competitively.
Likewise,
China, facing U.S. restrictions on soybeans and agricultural imports, began
sourcing from alternative markets, albeit with limited Indian gain due to
India’s own protectionist tendencies and lack of surplus in key agricultural
commodities.
But
Not Without Challenges
While
the trade war presented opportunities, India’s structural bottlenecks prevented
a full-scale leap. Inconsistent policies, infrastructural inefficiencies,
complex labor laws, and bureaucratic delays continued to dampen investor
enthusiasm. Vietnam, Bangladesh, and even Mexico were often faster to
capitalize on U.S.-China tensions, drawing in investments India aspired to
claim.
Moreover,
India’s own trade frictions with the U.S.—on issues such as medical devices,
e-commerce regulations, and market access—cautioned against overreliance on one
power in a time of multipolar recalibration. And China's growing presence in
South Asia and global institutions remains a complex challenge for India’s
strategic ambitions.
The
Road Ahead
The
Trump-era trade war was not merely a bilateral clash—it signaled a systemic
rethinking of globalization. For India, the episode underscored the urgency of
reform. To be more than a substitute, India must become a reliable, consistent,
and innovation-friendly trade partner.
Geopolitical
disruptions are inevitable. But for India to turn such crises into sustained
gains, the key lies in long-term capacity building, not just momentary
advantage. As the world de-risks its supply chains and hedges against
authoritarian overreach, India has a rare chance to reposition itself—both as a
manufacturing hub and as a voice for equitable, rules-based global trade.
Whether
it seizes the moment will depend not on tariff tables in Washington or
Beijing—but on decisions made in New Delhi.
(Views
are personal. Dr. Anee Bhattacharyya is an Assistant Professor at Amity
University, Bengaluru)
