Why Even a Win-Win With the USA Will Be a Big Win For India

India seemingly faces stiff trade barriers from the United States, but in reality, these challenges are not as worrying as they might seem. India’s exports to the US, just about $78 billion a year, are tiny compared to its huge $4 trillion GDP - less than 2 percent. This means that even if US policies make selling to America harder, India’s economy won’t be badly hurt, since it mostly depends on its own people and growing trade with other countries.

The US often blames India for putting high tariffs or taxes on things like cars and electronics. For example, India has very high duties - sometimes up to 100 percent - on imported cars. But even if India cut these tariffs, American cars would still struggle to sell in India because they are far more expensive than cars from India, China, Korea, or even Japan. Indian customers want value for money, and local or Asian brands already meet these expectations at much lower prices. Removing tariffs would not suddenly open the floodgates for expensive US brands.

Trade talks now are caught in a web of international politics, especially because of the Russia-Ukraine war. Some in the US claim India’s oil purchases from Russia help fund the Russian war effort. But in truth, it is the US that has benefited hugely from the Russia-Ukraine conflict, selling over $68 billion worth of weapons to Ukraine since the war began. American companies, especially arms manufacturers, have made big profits while the war continues. Accusing India is more about politics than fact.

US decisions aren’t just about policy, they are influenced by business interests. Former President Biden’s government strongly backed Ukraine, partly because of his family’s connections to businesses there, and this has been well reported in the American press. The current President Trump is more selective, while arms sales continue, deeper US support for Ukraine has faded. Reports link some of Trump family’s business interests in Moscow, which could explain America's cooler approach to supporting Ukraine these days.

India has options. A zero-tariff trade deal with the US, where both sides drop taxes on many or even most products, could actually help India more, and not hurt it. With Indian exports like textiles, chemicals, IT services, and medicines, India could get more access to American buyers. Since US goods are expensive and not highly competitive in India, the risk of India’s market being swamped by US goods is low. Instead, Indian exporters could grow, learning from global standards and succeeding abroad.

But security remains a worry. The US keeps making overtures to Pakistan’s top military, especially welcoming their army chief with honors. This signals that Washington may still view Pakistan as a valuable partner, despite its poor track record on regional peace. This is quite ironic too, given the military animosity the US has with China, and how close China and Pakistan are. Trump family's business interests in Pakistan have also come under scrutiny recently. India must speak up in diplomacy, making it clear that stability in South Asia is non-negotiable.

There have been more pressure tactics. US officials recently raised the H1B visa fees, needed by Indian tech talent hoping to work in America, by almost 40 times. This is meant to push India diplomatically. But it could backfire, with the US tech industry relying on Indian engineers, and hurting them will cause problems for American firms, especially when local talent is in short supply.

India should not get distracted with all these. Instead, it should focus on building better ties with many countries, not just America. India is strengthening relations with the EU, UAE, ASEAN, and Latin American countries, opening up more trade channels.

India can also act quickly when needed. When US tariffs started rising, the Indian government recently responded by slashing GST rates on popular items just before the festive season, giving families more spending power and businesses a boost. Creative steps like tax cuts are a response to tough times and show India’s ability to adapt and thrive.

India’s biggest strength is indeed its booming home market. There are over 300 million middle-class consumers in India, and retail sales during Diwali 2024 alone had hit Rs 2 lakh crore - a sign of powerful domestic demand. By supporting small businesses, startups, and local supply chains, India can weather global storms. In the past year, Indian startups attracted $15 billion in new investment, proving India’s growing confidence.

In the end, the US trade barriers are not an existential crisis for India. Since Indian exports to the US are very small compared to India’s total economic size, and because US goods are not a big threat in the Indian market even without tariffs, India can confidently pursue fairer trade deals. By resisting political pressure, calling out misdirection, and pursuing reforms at home, India can turn challenges into stepping stones toward greater growth and global leadership.