Normalization of trade relations between India and the United States boosts their global exports

Analysts from the ANZ Bank research department have evaluated how the de-escalation of trade tensions with Washington could transform India’s export position in international markets. According to financial reports, this change in trade relations would significantly benefit Indian exporters by reducing the unfair competition they face from Asian peers.

Tariff reduction opens new opportunities

Currently, India applies a reciprocal tariff rate of 18%, a figure that has limited the competitiveness of its products in international trade. A less tense environment would allow narrowing this competitive gap with other economies in the region. While it is realistic to expect that U.S. tariffs on sensitive sectors such as agriculture will remain partially protected, it is anticipated that trade friction will gradually decrease.

Reorientation of Indian energy imports

India’s trade strategy would undergo substantial changes in its energy matrix. Currently dependent on crude oil from Russia, the Asian country could diversify its energy purchases more towards U.S. suppliers. This transition would represent a significant repositioning in global energy supply chains.

Long-term investment commitments

The Indian government has set an ambitious goal of acquiring over $500 billion in U.S. products and services. ANZ Bank analysts emphasize that this commitment should be understood as a long-term strategy rather than an immediate shift in bilateral trade policies.

Economic growth projections

With the stabilization of trade relations, macroeconomic prospects strengthen. ANZ Bank projects that India’s GDP growth rate will reach between 6.8% and 7% during the fiscal year ending in March 2027, reflecting the positive impact of normalized trade on the Indian economy.