India said that while opening up its markets to foreign players, it remains sensitive to safeguarding the interests of domestic players, citing the recently concluded Free Trade Agreement signed with the UK.
Hours after US President Donald Trump announced a 25% tariff on Indian goods, New Delhi said it would take firm steps to secure the interests of farmers, entrepreneurs, and MSMEs, while continuing to engage in trade negotiations with Washington D.C.
“India and the US have been engaged in negotiations on concluding a fair, balanced and mutually beneficial bilateral trade agreement over the last few months. We remain committed to that objective,” India said in a statement.
India said that while opening up its markets to foreign players, it remains sensitive to safeguarding the interests of domestic players, citing the recently concluded Free Trade Agreement signed with the UK.
“The Government attaches the utmost importance to protecting and promoting the welfare of our farmers, entrepreneurs, and MSMEs. The Government will take all steps necessary to secure our national interest, as has been the case with other trade agreements including the latest Comprehensive Economic and Trade Agreement with the UK,” the statement further read.
India’s tariff structure has drawn repeated criticism from Trump, dating back to his first term and even before he took oath for the second, with him calling New Delhi a “very big abuser” when it comes to levying duties on US products.
Even after several rounds of discussion, agriculture remained the biggest bone of contention between the two sides, with India unwilling to open up its farm and dairy sectors to the US— a political self-goal that no ruling party at the Centre is willing to commit to.
The newly announced duties target several of India’s top-performing export sectors. Automobiles, auto components, steel, aluminum, smartphones, solar modules, marine products, gems, jewellery, and select processed food and agricultural items are all on the 25% list. Pharmaceuticals, semiconductors, and critical minerals, however, have been excluded.
Meanwhile, economists see a new opportunity on the horizon for India to forge deeper economic ties with other countries, explore new markets, and simultaneously look inward—driving reforms as global supply chains are recalibrated amid changing geopolitics driven by Trump’s aggressive trade policies.
However, economists estimate that India’s GDP could shrink by anywhere between 0.2% and 0.5% if Trump’s tariffs remain in place for the rest of FY26.
Earlier, Trump announced that India would slap a 25% tariff along with additional penalties on Indian imports, effective August 1. He cited India’s continued oil imports from Russia and longstanding trade barriers as key reasons behind the move.
