India Skips Tariff Retaliation, Focuses on US Trade Deal

New Delhi: India won’t retaliate against Trump’s 26% tariff on imports, said an Indian government official.
The official cited ongoing trade deal talks between India and the US as the reason behind this decision.

Prime Minister Modi’s government reviewed a clause in Trump’s tariff order offering relief to cooperative trading partners. The clause allows exceptions for countries taking steps to fix non-reciprocal trade practices, the official said. The official remained anonymous as the trade discussions are confidential and ongoing.

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New Delhi believes early trade talks with Washington give it an edge over Asian peers, a second official stated. The official said India is better positioned than China, Vietnam, and Indonesia, affected by higher US tariffs. This official also chose to remain anonymous, citing confidentiality of the discussions.

After Trump’s tariff move shocked markets, India joined Taiwan and Indonesia in rejecting counter tariffs.
Meanwhile, the European Commission plans extra duties on US goods after China retaliated.

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India and the US agreed in February to finalize a trade deal by autumn 2025 to end tariff disputes. The Prime Minister’s office has not responded to an email request for comment. Reuters reported New Delhi may cut tariffs on $23 billion worth of US imports.

Modi’s government took steps to please Trump, like cutting tariffs on luxury bikes, bourbon, and digital service taxes. Trump’s tariffs may reduce India’s growth by 20-40 basis points this year and hurt the diamond export industry. India’s diamond sector, heavily dependent on U.S. exports, may lose thousands of jobs due to the new tariffs.