In response to the United States’ announcement of reciprocal tariffs set to commence on April 2, 2025, the Indian government has adopted a cautious and proactive approach to mitigate potential trade tensions and strengthen bilateral relations.
Engagement in Bilateral Trade Negotiations
During Prime Minister Narendra Modi’s visit to the U.S. in February 2025, both nations agreed to negotiate a comprehensive Bilateral Trade Agreement (BTA). The objective of this agreement is to enhance two-way trade in goods and services, increase market access, reduce tariff and non-tariff barriers, and deepen supply chain integration. External Affairs Ministry spokesperson Randhir Jaiswal emphasized that the governments are advancing discussions on this multi-sector trade pact.
Consideration of Tariff Reductions
In light of the impending U.S. tariffs, India is contemplating reducing its own tariffs on certain imports from the United States. This move aims to address U.S. concerns and facilitate smoother trade relations. Discussions include potential reductions in tariffs on automobiles and agricultural products, although specific details are yet to be finalized.
High-Level Diplomatic Engagements
Commerce Minister Piyush Goyal recently visited Washington, D.C., to engage in talks with U.S. counterparts. These discussions focused on advancing the proposed trade agreement and addressing mutual concerns related to tariffs and market access.
U.S. Acknowledgment of India’s Initiatives
U.S. President Donald Trump has acknowledged India’s willingness to reduce tariffs, attributing this development to the U.S. administration’s efforts in highlighting trade imbalances. He stated that India has agreed to lower tariffs, indicating progress in addressing longstanding trade issues.
Strategic and Measured Response
Unlike some other nations that have opted for immediate retaliatory measures, India has chosen a measured approach, focusing on dialogue and negotiation to resolve trade disputes. This strategy underscores India’s commitment to maintaining stable and mutually beneficial trade relations with the United States.
In summary, India’s response to the new U.S. tariff policy involves active engagement in trade negotiations, consideration of tariff reductions, and high-level diplomatic efforts to ensure the continuation of strong bilateral economic ties.