Will India Hit Back at Trump Tariffs? Govt Official Finally Speaks Out

Amid rising global tensions over US President Donald Trump's 26% tariff on imports from India, a senior government official has confirmed that New Delhi does not intend to retaliate - at least for now - as trade negotiations between the two nations continue. The official, speaking on condition of anonymity due to the confidential nature of the talks, told Reuters that India is carefully studying a clause in Trump's order that leaves room for exceptions if countries take "significant steps to remedy non-reciprocal trade arrangements."

Positioning itself strategically, the Indian government sees an opportunity to lead regional peers in trade discussions with Washington. A second unnamed official said India is better placed than countries like China, Vietnam, and Indonesia - all of whom have been hit by the sweeping US tariffs - because of its proactive outreach.

India Joins Taiwan, Indonesia in Holding Off on Counter Tariffs

In the immediate aftermath of Trump's tariff announcement, India joined countries like Taiwan and Indonesia in opting not to impose counter tariffs, according to the report. Meanwhile, other global players, including the European Commission, are preparing to slap additional duties on US goods in response to China's retaliation.

To de-escalate the ongoing trade standoff, India and the United States agreed in February to finalise a trade deal by autumn 2025. However, the Prime Minister's Office has not yet responded to media inquiries on the matter.

Modi's administration has already made several goodwill gestures, including lowering import duties on luxury motorcycles and bourbon, and withdrawing a controversial digital services tax that had drawn criticism from US tech firms.

Despite the measured approach, economists caution that Trump's tariffs could shave off 20-40 basis points from India's GDP this financial year. The diamond industry, which exports over a third of its output to the US, is particularly vulnerable - raising concerns about potential job losses.