NEW Delhi officials are weighing their options on trade concessions they can offer to the US after President Donald Trump’s decision to impose a 50% tariff on Indian goods, according to people familiar with the matter.
India views the 21-day window before the new duties take full effect as an opportunity to keep negotiations with the Trump administration, the people said, asking not to be identified discussing sensitive matters. At this stage, officials are not planning to retaliate, they added.
As India calibrates its response, securing a potential trade deal with the US is among its top options, the people said. Officials are assessing whether some concessions, particularly in the agriculture and dairy sectors, could be offered to address US demands while minimizing the impact on domestic producers.
One proposal under discussion involves allowing limited imports of genetically modified corn for non-human consumption, with strict traceability requirements, one of the people said.
India’s Ministry of Commerce and Industry did not immediately respond to a request for comment.
Trump on Wednesday signed an executive order imposing a 25% tariff on Indian imports, citing the country’s continued purchases of Russian oil. The measure adds to an earlier 25% tariff announced last week. The higher duty will come into effect within three weeks, leaving a narrow window for further talks.
Indian officials intend to pursue diplomatic and trade channels before considering countermeasures, the people said. Their goal is to secure a bilateral agreement that preserves India’s strategic autonomy, they added.
The Ministry of External Affairs defended the country’s purchases of Russian oil, saying it’s necessary for its energy security. It also criticized Trump singling out India when other countries are doing the same. “We reiterate that these actions are unfair, unjustified and unreasonable,” a ministry spokesperson said in a statement on Wednesday.
India is a major export market for the US and has reason to remain firm, said Soumya Kanti Ghosh, chief economic advisor of the State Bank of India Group and member of Prime Minister’s Economic Advisory council. “Hopefully, a favorable trade deal benefiting both countries can be secured within the next three weeks.”
‘No Logic’
Trump’s tariffs have left India shocked and disappointed, especially after both sides in recent weeks signaled progress toward a potential trade deal. An official from India’s Foreign Ministry criticized Washington’s approach on Thursday, saying there was “no logic or reason” behind its latest move.
Even Modi’s political rivals have lashed out at Trump, a rare moment of bipartisanship as public opinion at home hardens in favor of the prime minister. Trump had — until recently — enjoyed warm ties with Modi.
Rahul Gandhi, leader of the opposition Congress party, called Trump a bully and warned Modi not to give in to “economic blackmail.” Another opposition lawmaker, Priyanka Chaturvedi, criticized what she described as US hypocrisy, citing America’s own trade with Russia. “The question does arise as to what retaliatory measures we are going to take into consideration?” she told ANI.
Indian exporters have voiced concern, but have also pledged to support the government. “The industry is willing to take some pain,” said Pankaj Chadha, chairman of the Engineering Exports Promotion Council.
India will now explore new trade opportunities in South Asia, Africa and Latin America, Dammu Ravi, secretary for economic relations at the Ministry of External Affairs, said in televised comments. “It’s very natural for countries to look for alternatives when you are affected by wall of tariffs in any part of the world,” he said, noting that talks with the US are ongoing and expressed confidence a resolution is still possible.
Modi has so far avoided naming Trump directly, though he has urged Indians to buy local goods. On Thursday, he said he’s prepared to “pay a heavy price” to protect the interests of farmers and fishermen.
Despite the domestic backlash, the Modi government is not actively considering retaliation at this stage, people familiar with the matter said. One reason, they said, is India’s limited economic leverage compared to China, which holds sway over exports of rare earths. While China continues to buy more Russian oil than India, its trade dominance makes it a more difficult target for the US.
Still, India has reserved its right at the World Trade Organization to retaliate against higher US sectoral tariffs on steel and auto components by suspending concessions on some US goods. –BLOOMBERG
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