India’s growing trade surplus with the United States has placed the country squarely on the radar of the Trump administration. While not previously among the top 10 countries with the largest US trade deficits, India’s robust electronics exports have propelled it into this position in 2024. This shift carries significant implications for the Indian textile industry, particularly given the US President’s strong stance against trade imbalances and his inclination towards imposing tariffs.
The US trade deficit with India, driven primarily by electronics exports, has surged to $38 billion from January to October 2024, surpassing Italy. This trend mirrors the broader US trade deficit, which reached a record high in 2023, with China as the leading contributor.
The Trump administration has consistently emphasized its intent to reduce trade deficits through various measures, including the imposition of high tariffs. This strategy poses a direct threat to the Indian textile industry, which heavily relies on exports to the US market.
The US President’s repeated labelling of India as a “tariff king” highlights the growing tension surrounding trade relations. The threat of retaliatory tariffs, coupled with the administration’s focus on reducing trade deficits, creates a challenging environment for Indian textile exporters.
The Indian textile industry must closely monitor these developments and proactively adapt to potential trade barriers. This may involve diversifying export markets, enhancing product competitiveness, and exploring alternative trade agreements to mitigate the impact of potential US tariffs.
