Amid Trump Tariffs, S Jaishankar, US Counterpart Push For "Early Trade Deal"

India likes to do things differently. While the world has been struggling to get back on its feet after US President Donald Trump pulled the rug from underneath, with his reciprocal tariffs announcement, some nations, like China and Canada retaliated shortly after, with tit-for-tat tariffs. While China countered the US' 34 per cent with the same figure, Canada mirrored the US by announcing a 45 per cent levy on the automobile sector. Several other nations reached out to Washington in order to renegotiate its own tariffs in order to evade Trump's reciprocal move.

India took a different route. It said it will not retaliate to US' 26 per cent tariff announcement, nor will it reduce the tariffs it already imposes on America. Instead, New Delhi reportedly plans to absorb, adjust, and rework the trading dynamic in a way that President Trump's reciprocal tariffs will have a minimal impact on Indian exporters. At the same time, both nations are accelerating trade talks to put in place a "win-win" trade deal. Even before Donald Trump announced reciprocal tariffs, India placed itself in an advantageous position by becoming one of the first nations to initiate a mega trade pact with America.

JAISHANKAR-RUBIO PHONE CALL

In this regard, External Affairs Minister S Jaishankar and US Secretary of State Marco Rubio spoke over a phone call on Monday. Both leaders agreed that an "early conclusion" of the bilateral trade agreement will benefit both nations. The two leaders also had a detailed discussion on the situation in the Indo-Pacific region and the Indian subcontinent.

Shortly after the talks, Dr Jaishankar said that it was "Good to speak with Secretary Marco Rubio today. Exchanged perspectives on the Indo-Pacific, the Indian Sub-continent, Europe, Middle East/West Asia and the Caribbean. Agreed on the importance of the early conclusion of the Bilateral Trade Agreement. Look forward to remaining in touch."

Good to speak with @SecRubio today.

Exchanged perspectives on the Indo-Pacific, the Indian Sub-continent, Europe, Middle East/West Asia and the Caribbean.

Agreed on the importance of the early conclusion of the Bilateral Trade Agreement.

Look forward to remaining in touch.…

— Dr. S. Jaishankar (@DrSJaishankar) April 7, 2025

According to news agency Reuters, an official in the government has said that New Delhi has looked into a clause of Trump's tariff order that offers a possible reprieve for trading partners who "take significant steps to remedy non-reciprocal trade arrangements".

Another official told Reuters that India finds itself better placed than Asian peers like China, Vietnam, and Indonesia, which have been hit by higher US reciprocal tariffs. New Delhi and Washington have agreed to finalize an early trade deal by autumn 2025 - one that may completely resolve their differences on tariffs.

INDIA'S RECENT MOVES

New Delhi however, has signaled that since US' reciprocal tariffs are now imposed on India, the terms of negotiations will be on equal footing, and Washington's conditions on removal of subsidies, especially on pharma and agriculture, will no longer apply.

But at the same time, India has also taken a number of steps to win over Trump, including lowering tariffs on high-end bikes and bourbon whiskey, while also completely dropping a tax it imposed on digital services that affected US tech giants like Google, Microsoft, Meta, Amazon, and X, among others.

Meanwhile, India's Commerce Ministry is closely assessing the immediate impact of Trump's tariffs with all stakeholders. It said that feedback is being taken from exporters, especially those vulnerable to be impacted most - like diamond merchants. The department, it said, is also studying the opportunities that may arise from this tariff move.

ROBUST INDIA-US TIES

India and the United States enjoy a broad-based global strategic partnership covering nearly every major domain. The relationship is driven by shared democratic values, converging strategic interests, and dynamic people-to-people engagement. High-level exchanges continue to play a key role in advancing bilateral cooperation.

Both nations also have a robust economic partnership. New Delhi and Washington have set a target to more than double bilateral trade to $500 billion by 2030 from the current over $190 billion.

Both nations also invest heavily in each other. In the financial year 2023-24, the US was India's third-largest source of FDI, contributing USD 4.99 billion - around 9 per cent of total equity inflows. Indian companies are also making major investments in the US, with a 2023 CII study noting 163 Indian firms have invested over USD 40 billion, creating 425,000 direct American jobs.

(Inputs from Reuters)