India could benefit by up to $13.8 billion as US President Trumps tariffs 50% on EU goods threaten over half of Europe’s exports to America. India has a strategic chance to boost its trade share across key categories like diamonds, tyres and jewelry.
India Set to Gain Big as Trumps Tariffs Hit 55% of EU Exports to US
The global trade landscape is shifting once again with US President Donald Trump proposing a massive 50% tariff on European Union (EU) imports. While the tariffs could severely impact nearly 55% of EU’s exports to the United States, they open up a rare window of opportunity for other countries, especially India, to enhance their trade footprint. According to a recent Moneycontrol analysis, India could potentially gain up to $13.8 billion in export value if it strategically taps into the disrupted supply lines.
Trumps Tariffs 50% on EU: A Blow to European Trade Dominance
On May 23, 2025, Trump announced the imposition of a 50% tariff on EU imports, initially set to take effect from June 1. However, after a discussion with European Commission President Ursula von der Leyen, the deadline was postponed to July 9, allowing time for trade negotiations.
Despite the temporary relief, the EU’s $686 billion worth of exports to the US in 2024 remain at risk. Notably, the EU held a dominant market share in $305 billion worth of goods, representing more than half of U.S. imports in several critical sectors. These include:
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Vaccines and serums: 68.3% market share
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Medications: 51% share in $41 billion worth of imports
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Protein hormones and polypeptides: 95% share
In total, the EU had a dominant or 50% share in over 1,037 product categories under the six-digit HS code system.
Trumps Tariffs: Why India Stands to Gain from US-EU Trade Disruption
While immediate beneficiaries of the EU tariffs might be China, Mexico, and Canada, India too is well-positioned to take a substantial slice of the pie. The Moneycontrol analysis indicates that India could gain $13.8 billion by expanding its exports in key categories where it either surpasses or closely trails the EU.
In 644 Trumps tariff lines, India already exports more to the US than the EU. These lines alone offer an $8.5 billion opportunity for India to fill the potential gap left by Europe. Additionally, another $5.3 billion could be tapped where India lags slightly behind but could still compete effectively.
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Key Product Categories Where India Can Capitalize
India’s competitive advantage becomes more evident in several high-value sectors that stand to benefit directly from the EU’s tariff disadvantage:
1. Diamond Exports to US: $1.8 Billion Potential Boost
In 2024, India exported $6.9 billion worth of diamonds to the United States, while the EU also had a significant share. With rising tariffs, India could attract an additional $1.8 billion in diamond trade by filling the vacuum left by the EU.
2. Tractor Tyres: Niche but Lucrative
Though a smaller market, tractor tyre exports from India could completely replace the EU’s $106 million market in the US, given the right policy push and logistics readiness.
3. Jewellery: $3.1 Billion Already Exported
In the jewelry segment, the EU exported $3.6 billion, while India stood close behind at $3.1 billion. With favorable tariffs and improved bilateral relations, India can bridge this $500 million gap and potentially lead the market.
India’s Strategic Advantage: Ongoing US Trade Negotiations
India is actively engaging in talks with the US for a bilateral trade agreement, which, if successful, could provide preferential market access and help reduce existing tariff barriers. This would further strengthen India’s position as a reliable trading partner and allow it to penetrate deeper into the American market.
In 2024, India exported $91 billion worth of goods to the US, making the US one of India’s top trading partners. The proposed bilateral trade deal could further boost India’s export capacity across industrial, pharmaceutical, and consumer sectors.
Opportunities and Challenges Ahead for India
Opportunities:
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India already outperforms the EU in hundreds of product lines.
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High-growth sectors like gems & jewelry, pharmaceuticals, and industrial goods show immediate export potential.
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A US-India trade deal could offer long-term structural benefits.
Challenges:
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Indian exporters must ramp up production rapidly to meet potential demand.
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Trade logistics, regulatory approvals, and compliance with US standards could be hurdles.
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Competition from other low-cost producers like Vietnam and Mexico could limit India’s advantage if not acted upon swiftly.
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India Must Act Fast to Secure $13.8 Billion Trade Advantage
The looming Trumps Tariffs 50% on European goods may disrupt transatlantic trade, but for India, it presents a golden chance to strengthen its trade ties with the US. With over $13.8 billion in potential gains and a bilateral trade agreement on the horizon, New Delhi must act swiftly to capitalize on this opportunity.
By targeting key sectors and enhancing its export capabilities, India can not only mitigate EU’s loss but also emerge as a significant player in global trade realignment triggered by US protectionist policies.