President Donald Trump’s 50% tariffs on Indian exports have plunged US–India relations into one of their worst crises in decades. The tariffs, ostensibly imposed to punish India for now, threaten roughly $87 billion worth of Indian exports to the United States—hitting labour-intensive sectors like textiles, gems and jewellery, and shrimp the hardest. The World Bank’s October 2025 South Asia Development Update cited trade policy uncertainty among the factors that resulted in a downgrade of South Asia’s 2026 growth forecast by nearly a full percentage point.
In the same update, the World Bank offered India a path forward for improving its growth potential: lower your own tariffs, particularly the protective barriers on intermediate inputs that are more than double those of other developing economies. The report argues that tariff reductions could boost job creation, particularly in manufacturing, and improve India’s export competitiveness. The math seems straightforward and economically very sound—Indian consumers and exporters would benefit, while opening new opportunities for younger and higher-skilled workers.