India is exploring ways to placate Washington following US President Donald Trump’s unexpected 25% tariff threat, according to sources familiar with the matter.
Officials in New Delhi, who described the announcement as shocking and disappointing, said that India will not immediately retaliate and instead plans to focus on keeping trade talks alive.
Possible steps include boosting US imports, such as natural gas, communication equipment, and gold, to help reduce the $43 billion trade surplus with the US over the next three to four years. However, additional defence purchases, including the F-35 fighter jets, are not being considered.
Commerce Minister Piyush Goyal, addressing Parliament, said the government is gathering feedback from exporters and industry groups to assess the impact of these tariffs and will take “all necessary steps to secure and advance our national interest.”
Trump’s announcement also included a warning about penalties for India’s purchases of Russian energy and weapons. Despite these comments, US-India trade negotiations are still ongoing, and a final decision on the tariff is expected soon.
The US administration has expressed frustration over the slow pace of trade talks, with Treasury Secretary Scott Bessent criticising India for its close ties to Russia and reluctance to open markets.
Analysts believe Trump’s 25% tariff threat could be a negotiation tactic, similar to his previous approach with the EU.
Markets in India reacted modestly, with the rupee slipping 0.4% against the dollar before recovering slightly, and the NSE Nifty 50 Index dropping up to 0.9% before stabilising.
For now, India is expected to use increased US imports as a bargaining chip, while continuing to emphasise the protection of domestic farmers and small businesses in trade talks.
