BREAKING: India backs down from retaliatory tariffs on US goods, conceding to Trump. Officials now push for direct talks with the President for a new trade deal. pic.twitter.com/DJy1mSYIsz
— Election Wizard (@ElectionWiz) April 6, 2025
India is choosing negotiation over confrontation. In response to the United States’ 26 percent tariff on Indian imports, New Delhi has declined to retaliate. Instead of mirroring the move with countermeasures, India is signaling patience and strategy, not provocation. The goal is a bilateral trade deal that resets terms on firmer, fairer ground.
Washington’s tariff came with justification. U.S. officials cited India’s long-standing import barriers and restrictive trade practices as reasons for the penalty. But rather than react with tariffs of its own, India is playing the long game. Officials are betting that restraint now could lead to relief later, potentially earning India exemptions in future trade adjustments through diplomatic leverage, not brinkmanship.
Talks are already underway, with a target to finalize a new trade deal by the fall of 2025. The framework would address more than just tariffs. It aims to resolve deep-rooted disputes on digital trade, market access, intellectual property, and service-sector regulations.
The economic fallout from the U.S. tariffs will be real. Economists project a slowdown of 20 to 40 basis points in India’s GDP growth this fiscal year. Key export sectors such as diamond polishing, which channels most of its output to U.S. buyers, are under pressure. But India is not walking into the trap of economic escalation.
This is not passive diplomacy. It is strategic accommodation. India is already softening some trade barriers in good faith. Duties on Harley-Davidson motorcycles and American bourbon have been lowered. The controversial digital services tax that once drew U.S. ire has been scrapped. These moves are calculated to grease the wheels of negotiation and project India as a reliable, cooperative trade partner.
Contrast this with Beijing’s approach. After a similar tariff announcement, China fired back with a 34 percent retaliatory tariff on U.S. goods. The difference is stark. India is not looking to entrench economic war lines. It’s seeking to pivot from friction to framework.