India Won’t Retaliate Against Trump’s Tariffs, Eyes Early Trade Deal with US: Report

Amid global market jitters, India opts for diplomacy over countermeasures, betting on strategic trade talks to soften tariff impact.

April 7, 2025: As global markets continue to reel from the impact of US President Donald Trump’s sweeping tariff orders, India has officially decided against retaliating with countermeasures. Instead, New Delhi is focusing on clinching an early bilateral trade deal with Washington, hoping to gain an edge over other Asian nations hit harder by the escalating tariff war.

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According to a Reuters report, a senior Indian government official confirmed that Prime Minister Narendra Modi’s administration is exploring a provision in Trump’s order that offers leniency to trading partners who make efforts to correct “non-reciprocal trade arrangements.”

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“We are in early trade talks, and that positions us advantageously against nations like China, Vietnam, and Indonesia,” said the official, speaking on condition of anonymity due to the sensitive nature of the negotiations.

India Among Few Nations Skipping Counter Tariffs

Joining the ranks of Taiwan and Indonesia, India has opted to stay out of the retaliatory tariff game, even as China and the European Union prepare to escalate their trade responses. Analysts see India’s decision as a calculated move to shield its export sectors while avoiding a direct showdown with the US.

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This comes after President Trump slapped a 26% import duty on Indian goods—part of his broader 10% baseline tariff on all imports, effective April 5. The policy has sparked worldwide backlash and caused a $5 trillion rout in global stock markets.

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🛃 Concessions Made by India to Ease Tensions

In a bid to build goodwill with Washington, India has already taken several conciliatory steps:

• Reduced tariffs on high-end Harley-Davidson motorcycles and American bourbon.
• Scrapped its digital services tax, a move that had earlier drawn sharp criticism from US tech giants like Google and Amazon.

The Modi government sees these gestures as paving the way for an early trade pact, expected to be finalized by autumn 2025.

“We are prioritizing engagement over escalation,” said another official involved in the trade talks. “This measured approach could help us shield key industries from further disruption.”

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📉 Economic Risks Still Loom Large

While India has chosen dialogue, the economic impact of Trump’s tariffs remains a concern. Economists warn that the new US duties could:

• Lower India’s GDP growth by 20–40 basis points this fiscal year.
• Deal a major blow to the diamond industry, which sends over a third of its exports to the US, potentially affecting thousands of jobs.

The Prime Minister’s Office has not responded to requests for comment, but government insiders say the administration is closely monitoring sectoral impacts and could offer targeted support if needed.

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With a delicate balancing act between diplomacy and economic self-preservation, India is betting that early engagement with the Trump administration will pay off—especially as the trade war reshapes global supply chains and alliances.

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