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US Tariff Review Looms, India Assesses Impact

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  Published in Business and Finance on Monday, February 23rd 2026 at 18:06 GMT by The Hans India
      Locales: INDIA, UNITED STATES

New Delhi, February 23rd, 2026 - India's Finance Minister Nirmala Sitharaman stated today that it is premature to speculate on the potential impact of a looming review of US tariffs, but affirmed the government is actively assessing the situation. Her comments came following reports suggesting the United States is considering substantial increases to tariffs on a broad spectrum of imports, a move that could significantly disrupt global trade flows and affect India's burgeoning export sector.

The Commerce Ministry, according to Sitharaman, is currently undertaking a detailed analysis of the proposed changes. While refraining from specific commentary, the Minister emphasized the government's commitment to closely monitoring developments and preparing for potential consequences.

"It is too early to comment definitively," Sitharaman explained during a media briefing. "The Commerce Ministry is reviewing the situation, and we are diligently monitoring developments to understand the full scope of any potential impact."

The reports circulating indicate that the US administration is contemplating tariffs on a diverse range of materials, including key industrial metals such as aluminium, steel, copper, and titanium. This potential escalation in trade protectionism stems, in part, from ongoing concerns about unfair trade practices and the need to bolster domestic industries - particularly in light of continued economic competition from China. While the initial focus appears to be on Chinese imports, any broad-based tariff increases are almost certain to have ripple effects felt globally, including within India's export landscape.

India's Export Vulnerability

India's export sector, which has shown considerable resilience in recent years, is particularly vulnerable to such changes. Key export items for India, including steel products, engineering goods, and certain chemical compounds, could face higher duties, reducing their competitiveness in the US market. This could lead to decreased export volumes and potentially impact domestic manufacturing and employment.

The situation is further complicated by the current status of ongoing trade negotiations between India and the US. Discussions toward a comprehensive trade agreement have been stalled for several months, primarily due to disagreements on crucial issues like data localization policies, intellectual property rights protection, and agricultural market access. These sticking points have prevented the finalization of a deal that could have provided a more stable and predictable trade environment. The tariff review adds another layer of complexity to these negotiations.

Possible Scenarios and Indian Responses

Analysts predict several potential scenarios. If the US implements substantial tariffs, India may be forced to consider retaliatory measures, potentially escalating into a trade war. Alternatively, India could seek to negotiate bilateral agreements with the US to mitigate the impact of the tariffs on specific export items. Another strategy could involve diversifying export markets and focusing on regions with more favorable trade terms.

The Indian government has several policy options at its disposal. These include providing export incentives to offset the impact of tariffs, streamlining export procedures to reduce costs, and strengthening trade diplomacy to address the concerns of the US administration. Furthermore, encouraging domestic value addition and promoting import substitution could also help reduce India's dependence on exports to the US.

"The government is aware of the potential challenges," says Dr. Arpita Mukherjee, a trade economist at the Delhi School of Economics. "We need to be proactive in diversifying our export basket and exploring new markets. Simultaneously, we must push for a resolution of the ongoing trade negotiations with the US, addressing the concerns on both sides."

The China Factor

The US tariff review is inextricably linked to its trade relationship with China. The Biden administration has maintained a tough stance on China, accusing it of unfair trade practices and intellectual property theft. The proposed tariffs are seen by many as a continuation of this policy, aimed at reducing the US trade deficit with China and encouraging domestic manufacturing. However, the implementation of these tariffs could also disrupt global supply chains and lead to higher prices for consumers.

The implications for India are multifaceted. While increased tariffs on Chinese goods could create opportunities for Indian exporters to fill the void, India must also be prepared to navigate the potential fallout from a broader trade dispute between the two economic superpowers.

The next few weeks will be critical as the US administration finalizes its tariff policy and India formulates its response. The situation demands careful monitoring, strategic planning, and proactive diplomacy to safeguard the interests of Indian exporters and ensure the continued growth of the country's economy.