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Will India respond to the tariffs imposed by Donald Trump? A government official discusses strategy in public: Report

Richa Pandey
07 Apr, 2025

The possibility of former U.S. President **Donald Trump** returning to the White House has sparked concerns in India over potential new trade tariffs, reminiscent of his 2018-2019 trade wars. Recent reports suggest that the Indian government is preparing a strategic response in case Trump imposes fresh duties on Indian exports. A senior government official has now broken silence on India’s possible retaliation, signaling that New Delhi will not remain passive if targeted by U.S. trade restrictions.

*Background: Trump’s Previous Trade Actions Against India**

During his first term, **Trump aggressively imposed tariffs** on steel and aluminum imports, affecting Indian exporters. He also terminated India’s preferential trade benefits under the **Generalized System of Preferences (GSP)** in 2019, impacting $6 billion worth of Indian goods. His "America First" policy often clashed with India’s trade interests, leading to tense negotiations.

If Trump wins the 2024 election, experts fear he may double down on protectionist policies, targeting countries like India with higher tariffs on key exports such as textiles, pharmaceuticals, and engineering goods.

India’s Potential Retaliation Strategy**

A senior Indian trade official, speaking anonymously, revealed that **India is evaluating countermeasures** but will prioritize diplomatic engagement first. Key strategies under consideration include:

1. **Targeted Tariffs on U.S. Goods**

- India may impose higher duties on American agricultural products (like almonds, apples, and pulses) and manufactured goods (such as medical devices and machinery).

- In 2019, India had announced retaliatory tariffs on 28 U.S. products but delayed implementation due to negotiations. These could be revived.

2. **Non-Tariff Barriers & Regulatory Measures**

- India could tighten import regulations on U.S. products, such as stricter quality checks on food and tech imports.

- Slower customs clearances for American goods could also be used as leverage.

3. **Boosting Trade with Alternative Partners**

- India may accelerate free trade agreements (FTAs) with the **EU, UK, and Gulf nations** to reduce reliance on the U.S. market.

- Strengthening trade ties with Russia and China in select sectors could also be explored, though cautiously.

4. **WTO Dispute & Diplomatic Negotiations**

- If tariffs are imposed, India may challenge them at the **World Trade Organization (WTO)**.

- Backchannel diplomacy with U.S. business lobbies (which benefit from Indian markets) could help soften Trump’s stance.

*Economic & Political Implications**

- **Trade War Risks:** A full-blown trade conflict could hurt bilateral trade, which reached **$128 billion in 2023**.

- **Domestic Industry Impact:** Indian exporters (especially in IT, gems, and textiles) may suffer, while local manufacturers could benefit from reduced foreign competition.

- **U.S.-India Strategic Relations:** Despite trade tensions, both nations need each other in defense and tech (e.g., semiconductor partnerships). A balanced approach will be crucial.

Government’s Stance: Caution Over Confrontation**

The Indian government has indicated it prefers **dialogue over immediate retaliation**. Commerce Ministry officials have reportedly prepared a **"calibrated response plan"** to avoid escalating tensions while protecting India’s interests.

Conclusion: Will India Strike Back?**

If Trump returns with aggressive tariffs, India is likely to respond—but **carefully and proportionally**. New Delhi will likely combine **limited retaliatory tariffs, WTO challenges, and diplomatic pressure** to safeguard its economy without jeopardizing broader U.S.-India relations.

For now, Indian businesses and policymakers are watching the U.S. elections closely, hoping for a pragmatic resolution—but preparing for a trade battle if necessary.

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