The Indian government is carefully analyzing the impact of US President Donald Trump’s newly imposed reciprocal tariffs on Indian exports, as tensions escalate between the two nations over trade policies. In its first official response, the Department of Commerce stated that it is engaging with key stakeholders, including industry representatives and exporters, to assess the broader implications of the tariffs. The Ministry of Commerce and Industry emphasized that these discussions align with the vision of Viksit Bharat and could present new opportunities for India amid shifting global trade dynamics.
The United States has imposed a universal 10% import duty on all foreign goods entering the country, effective from April 5, with an additional 17% tariff on Indian imports set to take effect from April 10. This amounts to a total of 27% in duties on Indian exports, significantly affecting key industries. The US move is part of Trump’s broader economic strategy aimed at addressing trade imbalances and protecting domestic manufacturing. However, India sees this as a major disruption to its exports and supply chains, prompting swift diplomatic and economic responses.
The Finance Ministry disclosed that India and the US are currently engaged in high-level negotiations to finalize a Bilateral Trade Agreement covering multiple sectors. These discussions involve issues such as supply chain integration, investment promotion, and technology transfers, which are critical for maintaining stability in Indo-US trade relations. The negotiations reflect India's commitment to ensuring a balanced and mutually beneficial outcome while also safeguarding its exporters against potential financial setbacks.
In response to the tariffs, the Prime Minister’s Office (PMO) convened an emergency meeting to evaluate potential countermeasures. The meeting, chaired by the Principal Secretary to the Prime Minister, included top officials from the Commerce Ministry, NITI Aayog, the Department for Promotion of Industry and Internal Trade (DPIIT), and other key departments. The focus of the discussions was to chart a strategic course of action, including exploring alternative markets for Indian exports and strengthening domestic manufacturing capabilities to mitigate dependence on US trade.
Meanwhile, Minister of State for Finance Pankaj Chaudhary addressed the matter, contrasting Trump’s "America First" policy with Prime Minister Narendra Modi’s "India First" approach. “For (Donald) Trump, it’s America first, but for Modi, it’s India first. We are assessing the impact of reciprocal tariffs imposed by the US,” he told reporters. His remarks signal India's intent to take a firm stand while balancing diplomatic engagement with economic pragmatism.
Industry experts warn that the new US tariffs could have a significant impact on key Indian export sectors, including textiles, pharmaceuticals, automotive components, and IT services. The additional 27% duty could make Indian goods less competitive in the American market, prompting businesses to reconsider their export strategies. Some industry leaders have called for the Indian government to introduce countermeasures, such as reciprocal tariffs on US goods or increased incentives for domestic industries to cushion the impact.
At the same time, India may also leverage the situation to strengthen trade ties with other global partners, including the European Union, ASEAN countries, and emerging economies in Africa and Latin America. With the Make in India and Atmanirbhar Bharat initiatives already in place, there is an opportunity for India to reduce its reliance on the US market and diversify its export destinations.
As the situation unfolds, all eyes will be on how India maneuvers through these trade tensions. The coming weeks will be crucial as Indian policymakers weigh their options—whether to pursue a more aggressive trade stance or focus on diplomatic negotiations to ease tensions with Washington.
