(Image source from: x.com/WhiteHouse)

According to an official from the Indian government, India has no intention of retaliating against the 26 percent tariff imposed by US President Donald Trump on imports from the country, as negotiations are currently underway for a trade agreement. The official, who requested anonymity due to the sensitive nature of the discussions, mentioned that Prime Minister Narendra Modi’s administration is considering a provision within Trump's tariff directive that may provide relief for trading partners undertaking significant measures to address non-reciprocal trade policies. Furthermore, a second government official, also speaking on condition of anonymity, indicated that India perceives an advantage in being among the initial nations to engage in trade negotiations with the US, especially compared to Asian countries like China, Vietnam, and Indonesia, which are facing increased tariffs from the US.

Following Trump's tariff announcement that considerably unsettled global markets, India has joined other countries such as Taiwan and Indonesia in deciding against implementing counter tariffs, while the European Commission prepares to impose additional duties on US goods in response to China's retaliation. In February, India and the US agreed to expedite a trade agreement by autumn 2025 to address ongoing tariff disputes. The Prime Minister's Office in India did not respond promptly to an email seeking comments. As reported by Reuters last month, New Delhi is willing to reduce tariffs on US imports valued at $23 billion. To gain favor with Trump, Modi's government has undertaken several initiatives, including decreasing tariffs on luxury motorcycles and bourbon and eliminating a tax on digital services that impacted US technology firms. Trump’s tariffs could potentially hinder India’s economic growth by 20 to 40 basis points for the current fiscal year and threaten the diamond sector, which relies on the US for over a third of its exports, endangering numerous jobs.