Donald Trump “Actively Negotiating” Trade Deal with India as Tariffs Loom

Former U.S. President Donald Trump is reportedly “actively negotiating” a trade deal with India in the eleventh hour before steep US import tariffs on Indian goods come into effect. Trump’s team has been in talks with officials from India (as well as Vietnam and Israel) for a 26% tariff planned to take effect on Indian exports on April 9, according to a senior adviser cited in Google news.

Indian products would follow suit if there’s no agreement, facing a total 36% import duty, as the Trump administration proceeds to impose a 10% blanket tariff on all U.S. imports this weekend, as announced earlier. The fears were enough to rile Indian exporters and lead both sides to scramble to negotiate a deal before the clock runs out, showing the urgency of current US India trade negotiations.

India and others are caught in Trump’s tariff policy offensive.

The new trade policy regime was announced by Trump under his ‘Liberation Day’ initiative to protect U.S. industries from what he terms as unfair trade practices. On top of a 10% baseline tariff, the plan places steep, country-specific reciprocal tariffs of 34% for China, 26% for India, and 20 to 32% for others.

PM Narendra Modi was also termed a “good friend” by Trump and while he appreciated India under his leadership, he condemned the nation for not treating ‘U.S. fairly in trade terms’ often calling it one of the ‘highest tariffing nations’ in the world. The White House believes India’s high import duties keep U.S. exports down, which would increase by $5.3 billion a year if barriers were gone. Eric Trump warned that countries who drag out negotiations will face harder terms on Donald Trump tariffs, which are widely seen as a pressure tactic.

India Prioritizes Dialogue Over Retaliation

India’s government has so far responded cautiously and conciliated. Unlike China, there’s not been any talk of immediate tit for tat reprisals in the U.S. New Delhi is looking for negotiations to avert the situation.

In a statement, the Indian government said it was “carefully examining the implications of the various measures announced” by the US President and was engaging in consultations with all stakeholders, such as industry and exporters, as well as examining possible opportunities that are emerging as a result of the U.S. import tariff shift.

India wants to hold dialogue, not confrontation, and believes it has first mover advantage by negotiating with Washington early on a deal, an Indian official quoted by Breaking news platforms said. This official added all issues are ‘on the table’, in pursuit of ‘balanced and equitable’ pact encompassing both goods and services trade. These US India trade negotiations are part of today’s critical India news today headlines.

This is a part of India’s more broadly employed strategy which involves maintaining its vital economic relationship with the U.S., and in February, Modi visited Washington after Trump’s return to the Oval Office, when the two leaders launched a joint “Mission 500” aimed at doubling bilateral trade to $500 billion by 2030.

Aside from short-term frictions, they agreed to work towards a comprehensive bilateral trade agreement by fall 2025, meaning both sides are willing to take the long term partnership path. Indian officials are in constant contact with the Americans to speed up a deal to lift or reduce the new tariffs. “The official noted that India is unlikely to take immediate retaliation… and is working on negotiating a solution from bringing the duties down.”

That is a far cry from 2018-19 when many of America’s peers retaliated quickly to U.S. unilateral action in a series of global trade wars. U.S.-India trade relations were mired in turmoil during Trump’s first term as Trump pulled out India’s preferential export status under the GSP program in 2019 on the basis that India did not give it ‘equitable and reasonable’ access to its markets. India missed the opportunity for retaliation and, regardless of the flame that was lit, avoided a major trade war.

Export Sectors Brace for Impact

The 26% tariff threat that looms over the range of Indian export industries is being watched warily by Indian businesses and tracked closely by Today news and Google news outlets. Such a hefty duty would raise the total tariff on many Indian goods to 36 percent and could prove difficult for India’s economy, analysts warn, when domestic growth has slowed already and consumer confidence is weak.

The price hike is most vulnerable to the exporters in key sectors to lose market share in the U.S. Trade experts say that if the tariffs become effective, the following industries would face problems as follows:

Indian Electronics and engineering goods are negatively impacted by the Donald Trump tariffs, making it tough for these price-sensitive products to compete in the U.S. market. (current value of Indian electronics export to the U.S. is approximately $14 billion).

But like all gems and jewelry, precious stones, jewelry and gold products shipped to the U.S. at about $9 billion, demand from American buyers could soften as higher duties make gold more expensive.

India’s automobile components and aluminum exports were spared the latest round of tariffs but already face a 25 percent U.S. import tax from previous trade policy measures. The growth prospects of these industries in the foreign market would remain under pressure due to U.S. protectionist policies.

The fallout is being assessed by industries from textiles to chemicals but Trump’s plan for tariffs has not publicly disclosed the complete list of products that will be affected. Indian companies that are banking on the U.S. market are now advocating New Delhi to get exemption or rollback in return for negotiations.

Government trade officials said the government will support exporters with any relief measures that they will need and were also trying to discover where the pain points lie. Also at the same time, India’s trade ministry is looking at whether there are any niches that could switch global supply chains in the wake of the tariff shake up.

In fact, if India gets a deal and avoids the full 26 percent tariff, it could also give its exporters an advantage compared to competitors from places such as China, which faces a higher U.S. Chinese products tariff rate with no end to the tariffs in sight. Analysts note that giving potential relief could be a lower negotiated rate but are warning that escalating trade tensions around the world are a threat to the overall outlook.

Global Ripple Effects and High Stakes Ahead

Countries such as China, Canada, Japan, and the EU are weighing their responses. Trump accuses Beijing of ‘panicking’ as China slaps 34 percent retaliatory duty, adding to the ongoing saga of Chinese products tariff hikes. A protectionist cycle could have a fallout for a global recovery, harm businesses’ willingness to invest and push up consumers’ prices, economists warn.

The India US-India trade negotiations are being watched by the markets. Shares in India have fared better than its peers on the back of hopes that a diplomatic solution can be worked out. A deal will go some way to assuaging investor concerns of U.S. protectionism, but a failed deal will be inferred as trade war chaos and set off retaliation.

The stakes are high with just days until the deadline. It is very important for India to avoid the 26% tariff to protect its key export sectors. A deal would bolster Trump’s ‘America First’ story. This standoff’s outcome will determine global trade dynamics—either for a return to cooperation or more spillage into markets.