India Unlikely to Retaliate Against Trump Tariffs, Focuses on Trade Talks with U.S.: Report

Focuses on Trade Talks with U.S: India does not plan to retaliate against U.S. President Donald Trump's 26% tariff on imports from the Asian nation, an Indian government official said, citing ongoing talks for a deal between the countries.

Prime Minister Narendra Modi's administration has examined a clause in Trump's tariff order that offers a possible reprieve for trading partners who "take significant steps to remedy non-reciprocal trade arrangements," said the official, who declined to be named as the details of the talks are confidential.

In the days following Trump's tariff announcement, which has shaken global markets to their core, India joined nations like Taiwan and Indonesia in ruling out counter tariffs, even as the European Commission prepares to impose extra duties on U.S. products in response to China's retaliation.

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Positioning itself ahead of regional rivals, New Delhi sees an advantage in being one of the first nations to have started talks over a trade deal with Washington, and is better placed than Asian peers such as China, Vietnam, and Indonesia, which higher US tariffs have hit, a second government official said, also declining to be named.

Trump last week announced a 26% tariff on US imports from India, dealing a blow to exporters and risking exacerbating a slowdown in an economy already suffering from weak consumer confidence. A lower negotiated rate could provide some relief, though escalating global trade tensions are still a threat.

During his visit to Washington after Trump’s return to the Oval Office, Prime Minister Narendra Modi and the US president agreed to negotiate a bilateral trade deal by the fall of this year.

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The new tariffs are a setback for Modi’s government, which had already made several concessions to Trump on his trade and immigration agenda and indicated willingness to cut duties further on imports from America during a visit of US trade officials to New Delhi last month.

India’s restraint from immediate retaliation contrasts with its neighbor China, which decided to impose a 34% retaliatory tariff on all goods imported from the US.

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