^{Photo: BBC}

India’s trade negotiations with the United States remain active, even as hefty additional tariffs are set to take effect within days. Indian officials emphasized the need to protect national priorities while navigating a tense trade landscape that could impact billions in bilateral commerce.

Tariffs on the Horizon

Indian exports to the U.S. are facing tariffs of up to 50%, among the highest imposed by Washington, primarily in response to India’s increased purchases of Russian oil. A 25% tariff is already in place, with the remaining 25% scheduled to be enforced from August 27.

A planned visit by U.S. trade negotiators to New Delhi from August 25-29 was cancelled, dimming hopes for a last-minute compromise or delay in the levies.

India’s Redlines

At an Economic Times forum in New Delhi, Indian Foreign Minister Subrahmanyam Jaishankar stressed that New Delhi has non-negotiable redlines, particularly concerning the protection of farmers and small producers.

“It is our right to make decisions in our national interest,” Jaishankar said, highlighting India’s firm stance on safeguarding sensitive domestic sectors amid ongoing negotiations.

India-U.S. trade talks had previously stalled earlier this year, largely over India’s refusal to fully open its agriculture and dairy sectors. Bilateral trade between the two economies currently exceeds $190 billion, making resolution critical for both sides.

Economic Implications

Analysts at Capital Economics warned that if the full 50% tariffs are implemented and maintained, India’s GDP growth could be reduced by 0.8 percentage points in both 2025 and 2026. Longer-term effects could be more significant, potentially weakening India’s appeal as a global manufacturing hub.

Jaishankar also criticized the public nature of U.S. policy announcements, describing them as unprecedented compared with traditional diplomatic norms.

Disparities in U.S. Policy

India’s purchases of Russian oil have been singled out, despite other major buyers like China and the European Union maintaining larger trade volumes with Russia.

“If the argument is oil, then there are other big buyers. If the argument is who is trading more with Russia, then there are bigger traders,” Jaishankar said, pointing out the uneven application of U.S. trade scrutiny. He added that Russia-India trade volumes are smaller than Russia-Europe trade, and that previous trade discussions with the U.S. did not flag these purchases before tariffs were publicly announced.

Looking Ahead

With deadlines approaching and tariffs looming, the outcome of the India-U.S. trade talks could significantly impact India’s exporters, global supply chains, and investor confidence. New Delhi’s focus on defending strategic economic interests underscores the challenges of navigating international trade under an unpredictable policy environment.

‍