The impact will be as big as $600 billion and India will certainly be affected. The trade war started when the US imposed tariffs on Chinese imports. The US had a problem because they were running a trade deficit of $450 billion with China and wanted to reduce the trade deficit. To make Chinese exports more expensive, the US started to put penal tariffs of 25% on Chinese imports. China retaliated and that has triggered a trade war. The problem for countries like India is that a trade war will slow global trade and that will hurt India exports. Also when there is a trade war, countries like China will try to weaken their currency; the Yuan. When China weakens their currency, India will also be compelled to devalue the rupee to be competitive. That will hit FII flows into India in a big way.

The World Bank estimates that the full fledged trade war will take away 0.65% from global GDP. Considering the total world GDP of nearly $90 trillion that will result in a global GDP loss of $600 billion. That is the immediate effect. That will be other effects like weak rupee, loss of jobs, company shutdowns, bank loan defaults etc. That is why India has to worry about the impact of the trade war.