Trump’s Tariff Gamble on India: A Gift for UK and Europe?

President Trump’s latest tariff hikes, some as high as 50% on Indian goods, have thrown a wrench into U.S. - India trade flows. For exporters in textiles, gems, machinery, and even renewables, the U.S. market suddenly looks unpredictable, expensive, and politically fraught. Indian solar firms have gone so far as to say America is “not worth the risk.”

For the UK and Europe, however, this is an unexpected opening. Trade rarely tolerates uncertainty. When one market shuts the door, others can swing it open. The logic of trade diversion suggests that Indian exporters, squeezed by punitive U.S. tariffs, will look to redirect their goods and services toward friendlier markets.

Here lies the opportunity: the UK, fresh off post-Brexit manoeuvring, has finalised its FTA with India, while the EU is advancing deals through EFTA and bilateral channels. Faster tariff cuts, smoother customs processes, and mobility provisions for Indian professionals could make London, Frankfurt, or Paris more attractive hubs than Washington.

Of course, risks remain. Domestic industries may bristle at sudden inflows, and politics around visas is never simple. But the strategic prize is clear. By positioning themselves as reliable, rules-based partners, the UK and EU can lock in long-term trade, talent, and supply chain relationships at a moment when U.S. unpredictability is alienating one of the world’s fastest-growing economies.

The question for European policymakers and trade professionals isn’t whether opportunity exists. It’s whether they can move quickly enough before the window closes.