India Decoupled, Stands To Gain Big From US-China Trade War, Says Economist Akash Jindal

As the United States moves ahead with 100% tariffs on Chinese imports, worries about a global economic slowdown are deepening. But even as the world braces for the fallout, economist Akash Jindal believes India may have reasons to stay optimistic.

“This tariff war is going to hurt both the US and China, and the ripple effect could drag many economies down with them,” Jindal said, warning of a possible recession if the measures aren’t rolled back.

Also Read: Understanding Trump’s Tariffs and Their Impact on the Indian Economy with Former PHDCCI President Saket Dalmia | Republic World

China's pain is India's gain

The global tension stems from China’s heavy dependence on exports. Already battling issues like deflation, rising debt, and a stressed financial sector, the Chinese economy could face an even sharper decline under the weight of these new tariffs.

“China is in a vulnerable spot,” said Jindal. “And with investors pulling out, India has a real opportunity. Funds that were flowing to China are now looking at India instead.”

Jindal explained that India is now seeing stronger foreign portfolio inflows, a trend that could help boost the rupee, strengthen foreign exchange reserves, and energize stock markets. He added that some global manufacturers may also consider shifting operations from China to India as trade tensions rise. “This is a key moment for India to gain economic ground,” he said.

Upbeat on Indian government 

Jindal credited the Indian government’s steady hand in navigating recent global shocks. “During the Russia-Ukraine war, Prime Minister Modi managed strong ties with both Russia and NATO, secured oil at discounted prices, and still kept our global commitments intact,” he noted.

On the US front, Jindal sees potential for improved trade ties. “Given Modi’s relationship with former President Trump and India’s strategic importance, it’s quite likely that we’ll see some easing of tariffs on Indian goods.”

India’s relatively domestic-driven economy also gives it a degree of insulation, Jindal argued. “Unlike China, we’re not heavily dependent on exports. That gives us an edge in times like these,” said Jindal, adding, “Our key service sectors like IT and BPO are vital to US and global companies. They’re unlikely to be hit,” he said. “Indians don’t need to panic about this trade war. If anything, this is going to create more problems for others than for us.”

While global economies, especially the US, China, and parts of Europe and Japan, may bear the brunt of the fallout, Jindal believes India is well-positioned to weather the storm.