US-EU Tariff War Could Give India a Major Boost in Exports

New Delhi: The ongoing tariff dispute between the United States and the European Union could prove advantageous for India, potentially boosting exports and strengthening negotiations for the India-EU Free Trade Agreement (FTA). Trade experts suggest that the new tariffs imposed by the US on European goods may encourage the EU to focus more on stable trading partners like India.

US Imposes Tariffs on European Countries
According to The Economic Times, on 17 January, US President Donald Trump announced a 10% import tariff on countries including Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland. These tariffs were linked to the countries’ support for Denmark’s decision to block US interests in Greenland. The tariffs are set to take effect from 1 February and will rise to 25% on 1 June, remaining until the US achieves its so-called “full purchase” of Greenland.

Opportunity for India to Secure Better Trade Terms
Sanjay Jain, Managing Director of TT Limited, a ready-made garments exporter, said the EU may now be more motivated to finalize the operational aspects of the FTA quickly, which could help India secure better trade terms and expedite the ratification process.

Major India-EU FTA Announcement Expected on 27 January
India and the EU are expected to announce the conclusion of FTA negotiations during a summit in New Delhi on 27 January. The announcement will coincide with the state visits of European Council President Antonio Costa and European Commission President Ursula von der Leyen from 25–27 January. Both leaders will also attend the Republic Day celebrations in Delhi on 26 January.

India’s Export Advantage Amid Global Trade Tensions
Officials noted that India, as a stable trading partner, stands to gain amid global trade volatility. Despite uncertainties in US-China trade relations, India’s exports to the US have continued to grow.

• In December 2025, India’s exports to the US declined 1.8% year-on-year to $6.88 billion, while China’s exports rose 67% to $2.04 billion.
• Between January–November 2025, India’s exports to the US increased 16% to $85.51 billion, compared to $73.76 billion the previous year. In the same period, China’s exports to the US rose 15% to $16.03 billion.

Experts See India Benefiting from US-EU Tariff Dispute
Ajay Sahay, Director General of the Federation of Indian Export Organisations (FIEO), said that if a full-fledged tariff war erupts between the US and EU, businesses may shift operations to other countries, benefiting India and other partners. The India-UK trade agreement, signed last July, could also see faster implementation due to the FTA ratification process.

‘Mother of All Deals’ for India
Commerce and Industry Minister Piyush Goyal recently described the India-EU FTA as the “Mother of All Deals,” assuring that India will not compromise its national interests. The agreement is expected to be mutually beneficial. Commerce Secretary Rajesh Aggarwal added that the negotiations are in the final stages, with remaining issues being resolved ahead of the European leaders’ visit later this month.