India Navigates Trump’s Trade Winds: Dodging Tariffs & Securing Deals

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26% Tariff Threat Looms: India Pushes for Urgent US Trade Agreement

Losing just a few days nearly to go towards the deadline, India is described as prepared with its measures to counter the 26% retaliatory duty imposed by the U.S. An American trade delegation is coming up as the last set of talks over an interim trade pact is scheduled to visit New Delhi in the forthcoming weeks. 

Set to expire on July 9, the negotiators are under pressure to hammer out an agreement on time with the 90-day extension on these punitive US tariffs currently pending.

India Rushes to Secure Trade Deal as 26% US Tariff Looms; High-Level Talks Underway

A 26 percent duty was slapped on Indian goods from April 2. The scope of goods is fairly extensive. This specific tariff is now suspended for 90 days. But the Indian exports continue to face a 10 percent base tariff from the US, which New Delhi is asking to be removed too. Time is running out for both, and sources inform the Times that negotiations have been moving very fast.

India's chief negotiator, Rajesh Agrawal, serving as Special Secretary, Department of Commerce, has just returned from Washington after a successful four-day stint of direct talks with his US counterpart.

Piyush Goyal, Minister of Commerce and Industry, has added political impetus to the discussions by meeting with United States Commerce Secretary Howard Lutnick twice on his recent trip to Washington.

Bilateral Trade Hits $131 Billion as India Seeks Full Tariff Relief Amid Interim Deal Push

With stakes so high, the US has been carrying the mantle of India's largest trading partner for four years running, bilateral trade reaching a considerable $131.84 billion in 2024-25. India currently holds a goods trade surplus of $41.18 billion with the US, which Washington understandably is keen to tackle.

India, on the other hand, prefers to go for complete tariff-free status to ensure sustained growth in its economy.

The talks are expected to carry through the conclusion of the first phase of a wider bilateral trade agreement by fall (September-October) this year, targeting a very ambitious goal of doubling the bilateral trade to the figure of $500 billion by 2030.

However, building on that, the nearer-term focus is for an interim deal to be sealed prior to July 9. This would cover only a limited range of goods and services, with the US seeking to open Indian markets to a number of goods, including agricultural products.

The whole situation is further complicated by the fact that President Donald Trump has again taken a stand opposing tariffs levied on Apple's attempt to get its iPhone manufactured in India for the US market: Trump warns these devices will line up for a 25% tariff if the production does not move to the US.

India's Strategic Maneuver: Dodging Trump's Tariffs Amidst Unpredictable US Trade Policy

While this would most likely be a negotiating tactic, it serves to expose the unpredictable nature of US trade policy under a potential future Trump administration and highlight the predicament facing India in these dynamics.

In a tactical move, India seems to be positioning itself. Way ahead of this, India has shown signs of willingness to grant at least 50% tariff reductions on the entire $23 billion worth of American imports. Indian industries feel a larger benefit under the broad US tariff structure on China and Vietnam, which has been made high. The next few weeks in Delhi will prove to be crucial, as the stakes are high for India to escape the imminent threat of tariffs and get a mutually beneficial agreement.

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