India has no intention of responding to U.S. President Donald Trump’s 26% tariff on imports from the country, according to an Indian government official who mentioned ongoing negotiations for a trade agreement between the two nations.
The administration of Prime Minister Narendra Modi is examining a provision in Trump’s tariff directive that could provide relief for trading partners that “take significant steps to address non-reciprocal trade arrangements,” as stated by the official, who requested anonymity due to the confidential nature of the discussions.
New Delhi perceives a strategic advantage in being among the first countries to initiate trade negotiations with Washington, positioning itself more favorably than other Asian nations such as China, Vietnam, and Indonesia, which have faced increased U.S. tariffs, according to a second unnamed government official.
Following Trump’s tariff announcement, which has significantly impacted global markets, India, along with countries like Taiwan and Indonesia, has ruled out imposing counter-tariffs, even as the European Commission prepares to impose additional duties on U.S. products in response to China’s actions.
In February, India and the U.S. agreed to finalize a preliminary trade deal by autumn 2025 to address their tariff disputes.
The Indian prime minister’s office has not yet responded to an emailed inquiry for comments.
Last month, Reuters reported that New Delhi is willing to reduce tariffs on U.S. imports valued at $23 billion.
See more: Italy’s Meloni pledges to support businesses hurt by Trump tariffs
Modi’s government has undertaken several measures to gain favor with Trump, including reducing tariffs on premium bicycles and bourbon, as well as eliminating a tax on digital services that impacted U.S. technology companies.
Trump’s tariffs could potentially hinder India’s economic growth by 20-40 basis points in the current financial year and may severely affect India’s diamond industry, which exports over a third of its products to the U.S., jeopardizing thousands of jobs.
