Economic Effects of United States Tariffs on India's Export and Import

This study looks at the economic effects of U.S. tariffs on India's exports and imports, placing recent policy changes within the larger context of India-U.S. trade relations. It specifically examines the U.S. tariffs imposed under Section 232 and Section 301, along with the tariff expansions of 2025. These changes directly impact important Indian export sectors like steel, aluminum, textiles, gems and jewelry, and pharmaceuticals. Using product-level data from UN Comtrade, USITC DataWeb, and WITS, the paper uses a difference-in-differences framework, along with gravity model estimations and event-study methods, to measure how tariffs affect India's trade flows with the U.S. The results show notable declines in exports to the United States that are affected by tariffs, some trade moving to other markets, and increased input costs for Indian industries reliant on goods impacted by these tariffs. Beyond the trade volume, the findings show signs of sectoral shifts, changes in firm pricing strategies, and adjustments in India’s market diversification policies. By mixing empirical analysis with policy assessment, the paper illustrates how U.S. tariffs change partner economies and provides recommendations for India to reduce vulnerability through strategic trade talks, export diversification, and domestic competitiveness improvements.