India has found itself at the centre of President Trump’s fiery rhetoric in his first address to Congress since returning to office.
Trump has made it clear that unless India reduces its tariffs on US goods, Washington will not hesitate to impose retaliatory measures.
When asked about these developments, trade expert Abhijit Das chuckled, dismissing the statement as anything but breaking news. “What President Trump has said is absolutely no news,” he remarked.
Das explained that India had already taken steps to address some US concerns. “In the recent budget, India did reduce tariffs on certain products of interest to the United States. Moreover, during Prime Minister Modi’s visit to Washington, both countries agreed to negotiate a multi-sectoral bilateral trade deal. Any such negotiation, by definition, involves reducing tariffs.”
However, he cautioned, the bigger issue was not tariffs themselves but the structure of the agreement. “The real concern should be the architecture of the trade agreement, rather than just the tariff reductions,” he said.
As Indian ministers work to navigate this complex negotiation, Das pointed out that India’s tariffs are often portrayed as unfair—but this is a misleading narrative. India’s historically high tariffs on US goods stem from commitments made under the General Agreement on Tariffs and Trade (GATT).
“India secured the right to impose higher tariffs while the US agreed to keep its rates lower. But this wasn’t a one-sided deal,” Das recalled. “In return, India made significant concessions, particularly in intellectual property rights, which had long-term repercussions for its pharmaceutical sector.”
Should the US decide to push ahead with retaliatory tariffs, Das warned that the consequences could extend beyond a simple tit-for-tat. “The US has indicated that it may go beyond just matching India’s tariff rates. There is a possibility of introducing non-tariff barriers as well, which could make it even costlier for Indian exporters.”
Despite the potential challenges, Das remains cautiously optimistic. He believes that negotiators will try to reach a balanced discussion that benefits both countries. However, he emphasized that India must be prepared to defend its interests if talks fail. “If the US imposes retaliatory tariffs, India may have to counterbalance by limiting IP protections for US rights holders,” he noted.
India has precedent for retaliation. During Trump’s first term, when similar threats arose, India responded with counter-duties on US imports, a move that signalled its willingness to defend its trade policies. If history is any indicator, Das believes that India might once again take a firm stance if necessary.
“If push comes to shove, the government could follow the same path as before—imposing retaliatory duties to safeguard its interests.”
For now, the world watches as trade negotiations unfold, with both nations weighing their next moves in a delicate economic chess game.
