Trump Hits India with Steep Tariffs as New Delhi Holds Firm on Trade Deal
U.S. President Donald Trump announced 25% tariffs on imports from India alongside an unspecified penalty, aiming to pressure New Delhi into a trade deal. Despite the announcement, India has not rushed into negotiations, instead maintaining a firm stance on protecting its sensitive agricultural sectors, which are vital to its large farming population and domestic politics. Indian officials emphasize prioritizing national interests over meeting arbitrary deadlines for trade agreements.
India resists opening its agricultural market to U.S. products, particularly genetically modified foods and dairy, citing the protection of its farmers and small businesses. Recent trade deals, such as the one with the U.K., highlight India’s careful approach to safeguard sensitive sectors from tariff concessions. This reluctance stems from the relatively small proportion of Indian exports to the U.S. economy and the political significance of farmers in India.
India’s role is crucial in the U.S.’s strategic economic policy, especially as Washington seeks to counterbalance China’s global influence. Analysts see India benefiting from the “China plus one” strategy, where companies diversify manufacturing away from China to other countries like India. This shift could complement the U.S. manufacturing resurgence by combining India’s lower labor costs with America’s advanced technological capabilities.
India’s membership in BRICS—a bloc of emerging economies including China and Russia—provides it with diplomatic leverage in negotiations with the U.S. India’s leadership ambitions within BRICS complicate its relationship with China and give New Delhi bargaining chips amid U.S. threats of tariffs on countries opposing American policies. India may use its stance within BRICS to reassure the U.S. and negotiate better terms.
India is actively pursuing multiple trade agreements worldwide, including deals with the U.K., the EU, and the Maldives, signaling a strategic move toward multi-alignment rather than reliance on a single partner. This diversification strengthens India’s negotiating position and economic resilience against global shocks. By building multiple trade partnerships, India aims to negotiate from a position of strength, balancing its economic growth ambitions with geopolitical realities.
Source: Cnbc