Donald Trump's return to the White House has injected a significant dose of uncertainty into global trade, and India is no exception. As the US pursues a more protectionist stance, India is carefully navigating these challenges while seeking to secure its economic interests. The central question is whether Trump's trade tactics are ultimately fair to India.
Trump's approach to trade is characterized by aggressive negotiation and a focus on reducing trade deficits. He has often accused India of being a "tariff king," pointing to its relatively high tariffs compared to the US. While India has gradually reduced its tariffs over the years, it still maintains protectionist policies in sectors like agriculture and automobiles. This has drawn the ire of the Trump administration, which views it as an unfair barrier to American exports.
In April 2025, the Trump administration imposed tariffs of up to 27% on Indian goods. However, these tariffs were paused for 90 days, creating a window of opportunity for India and the US to negotiate a trade deal. The two countries are now racing against the clock to reach an agreement before the July 9 deadline.
Trump has publicly stated that India has offered to drop all tariffs on goods imported from the US. However, this claim has been swiftly disputed by Delhi, with India's foreign minister emphasizing that talks are still ongoing and "nothing is decided till everything is."
Despite the differing accounts, both sides appear to be motivated to reach an agreement. Trump is eager to secure a foreign policy win and demonstrate that his "America First" agenda can deliver results. India, on the other hand, is keen to maintain access to the US market and avoid being caught in the crossfire of Trump's trade wars.
Negotiations are reportedly focused on a phased approach. An initial agreement is expected before July 9, covering areas like market access for industrial goods and some farm products. A broader deal, potentially timed around a visit by Trump to India for the Quad Leaders' Summit, is planned for September-October. The final agreement would likely require approval from the US Congress and could be concluded next year.
India is seeking full exemption from the 26% reciprocal tariff imposed by the US on domestic goods, while the US is pushing for lower tariffs on American products like Harley-Davidson motorcycles and access for American dairy and agricultural goods. India also wants easier market access for its pharmaceuticals and textiles.
Several factors complicate the negotiations. India is wary of making concessions in politically sensitive sectors like agriculture, where there is strong resistance to opening up to foreign competition. The US, on the other hand, is concerned about India's large trade surplus and wants to ensure greater market access for its goods.
Despite these challenges, both sides have strong incentives to find common ground. The US has been India's largest trading partner for the past four years, with total trade valued at $131.84 billion in 2024-25. The two countries have set an ambitious goal of increasing bilateral trade to $500 billion by 2030.
To mitigate the risks of relying too heavily on the US market, India is also pursuing trade deals with other countries and blocs, including the UK, the European Union, New Zealand, Oman, and Israel. This diversification strategy is aimed at building a "shield against Trump's uncertainty."
Whether Trump's trade tactics are fair to India is a matter of perspective. From Trump's point of view, he is simply trying to level the playing field and ensure that American businesses have fair access to the Indian market. India, however, argues that its tariffs are justified by its development needs and that it is already making efforts to reduce trade barriers. Ultimately, the fairness of any trade deal will depend on whether it is mutually beneficial and takes into account the interests of both countries.
