Will India retaliate against Trump's tariffs? Official breaks silence
What's the story
India has no intentions of retaliating against the 26% tariff imposed by United States President Donald Trump on imports from the country. An anonymous Indian government official confirmed the stance to the news agency Reuters. The official quoted continuing negotiations between the two countries as the reason behind India's decision not to respond in kind.
Trade negotiations
India's trade strategy and potential benefits
India's non-retaliation decision rests on a clause in Trump's tariff order, which provides possible relief to trading partners who "take significant steps to remedy non-reciprocal trade arrangements." Per reports, an Indian government source also highlighted that New Delhi is ahead of regional rivals in the game, as it was the first to start talks for a trade deal with Washington.
Global response
India's non-retaliation aligns with other nations
India's decision to not impose counter tariffs after Trump's announcement puts it in the same league as Taiwan and Indonesia. These countries also refused to retaliate despite global markets being thrown into disarray by Trump's tariffs. The country is also better placed than Asian counterparts such as China, Vietnam, and Indonesia, which have been hit by higher US tariffs. On the other hand, the European Commission is preparing additional duties on US products following China's suit.
Trade agreement
India and US aim for early trade deal
India and the US in February agreed to expedite a trade deal by autumn 2025 to resolve their tariff dispute. However, the Prime Minister's office in India has not yet commented on the development. Earlier reports indicated New Delhi is willing to reduce tariffs on US imports worth $23 billion as part of the negotiations.
Economic implications
India's concessions and potential economic impact
To ease trade tensions, the Modi government has given a number of concessions to the US. These included lowering tariffs on premium bikes and bourbon and removing a digital services tax that hit American tech giants. However, economists caution that Trump's tariffs could slow down India's economic growth by 20-40 basis points this financial year.