Impact of the US-India Trade War on the Indian Economy: An Empirical and Analytical Assessment

This paper critically examines the multifaceted impacts of the recent trade war between the United States and India, triggered in 2025 by the imposition of a 25% US tariff on Indian exports and additional sanctions related to India’s alignment with Russia. Employing a mixed-methods approach that combines quantitative trade and macroeconomic data analysis with qualitative assessments of policy and geopolitical factors, the study evaluates the consequences for GDP growth, sectoral performance, currency valuation, investment climate, and trade diplomacy. The findings indicate significant headwinds for India’s export sectors, moderate GDP growth suppression, heightened financial market volatility, and severe challenges in negotiating trade terms amid complex geopolitical dynamics. Policy recommendations stress export market diversification, domestic industrial strengthening, and balanced diplomatic engagements to ensure long-term economic stability. Keywords: US-India trade war, economic sanctions, export diversification, macroeconomic volatility, Indo-Russian relations, strategic diplomacy, sectoral performance, financial markets