Economic impact of the US-China trade war on India

Abstract

The United States and China together contribute to 19.8%1 of India’s exports and to 22.8% of India’s imports. Amendments in the trade policies of the two countries significantly alter production volumes affecting industries in India. With uncertainty looming over the trade relations in these two superpowers, domestic and cross-border investments might see a slowdown while also presenting an opportunity for India to increase its trade exports to the US if the superpowers’ relation sours further. Such dynamism is sure to impact the rupee value and market sentiments which will make the stock market more volatile and unpredictable. The study aims to conduct an empirical analysis of the impact of the US-China trade war on India in terms of market sentiments, currency movements and gold prices. Further, the study would delve into industry specific impact analysis to understand impact of tariff impositions between the US and China on India