Coca-Cola Faces Challenges in India Amid U.S. Tariff Dispute and 'Buy Local' Movement

Coca-Cola is currently facing significant challenges in India, a critical growth market, due to a 50% tariff on Indian goods imposed by the U.S. and a resultant 'buy local' movement. This movement, fueled by anti-American sentiment and supported by Indian business leaders and Prime Minister Narendra Modi's followers, poses a threat to Coca-Cola's established presence in the country. The company, known for its dominant position on store shelves and association with a modern lifestyle, must navigate these geopolitical tensions carefully.

The trade dispute, initiated by the Trump administration's tariffs and exacerbated by India's continued purchases of Russian oil, has led to calls for economic self-reliance among Indian consumers. This scenario is particularly concerning for Coca-Cola, as its second-quarter 2025 earnings report revealed a 1% global volume decline, with notable decreases in India and Mexico. Despite surpassing analyst expectations for adjusted earnings per share, the company's net revenues of $12.5 billion fell slightly short of forecasts, underscoring the potential impact of nationalistic consumer movements on its financial health.

As of August 14, 2025, Coca-Cola's stock (NYSE: KO) was trading at approximately $69.52, reflecting a daily decline of about 1.3%. While there's no immediate evidence of a significant sales drop, the situation underscores the vulnerability of foreign brands in markets susceptible to nationalist movements. Coca-Cola has yet to publicly address the boycott calls, adopting a cautious stance as diplomatic discussions between the U.S. and India proceed. The outcome of these tensions could have profound implications for American businesses in India, one of the world's fastest-growing economies.