Trumping Trade: USA Tariff Shocks and India’s Policy Response

Abstract

Tariffs, a part of International Economics, play a vital role in global trade. The recent imposition of additional tariffs in August 2025 has sparked debate over whether tariffs are instruments of overall economic welfare or political tools that may disrupt international trade. In this study, we examine the economic impact of high tariffs, focusing on their effect on the Indian economy. Further, we analyse the Government of India's policy intent for its export-oriented sectors. Our study demonstrates that the Indian government leveraged this challenging situation into an opportunity by exploring new markets and promoting manufacturing.