With Donald Trump’s reciprocal tariff coming into force from Saturday, the Indian government is now hoping for a solution through the Bilateral Trade Agreement (BTA) with the US. “We are expecting a fair and equitable treatment under the ongoing Bilateral Trade Agreement with the US,” government sources have said. A top government official said that India is poised to benefit from the ongoing global trade war, and may even see exports grow in FY26.
"India has emerged as a winner in the reciprocal tariffs imposed by the US," sources said, adding that India has the first mover advantage as it is negotiating a bilateral trade agreement with America.
The sources further said Indian exporters are better positioned to deal with the additional US tariffs as compared to their competitors, who are facing much higher import duties in the US. Analysts and trade experts have also said that India could emerge as a relative gainer, as the burden of import duties is significantly higher on other emerging nations such as China and Vietnam.
The reciprocal tariff rate on Indian goods is 26% compared to 54% (20% previously imposed + 34% announced on Wednesday) on China, 46% on Vietnam, 37% on Bangladesh, and 36% on Thailand.
The US government has announced a baseline tariff of 10% on all imports (effective April 5), with specific reciprocal tariffs on multiple countries (effective April 9). Some sectors, including pharmaceuticals, semiconductors, copper, and energy products, will remain exempt from these tariffs. The government sources also said it is ready to protect domestic industry from any possibility of dumping of goods from countries like China and Vietnam.
It is feared that with the US imposing a 54% tariff on Chinese imports, India could become a dumping ground for surplus Chinese goods. India already has a trade deficit of $100 billion with China, which exported $440 billion worth of merchandise goods to the US in 2024 and had a trade surplus of $295 billion with that country.
India has been proactive in levying anti-dumping duties on various Chinese goods, yet the country has managed to dump products below the production costs of Indian manufacturers.
In 2024, India’s Directorate General of Trade Remedies (DGTR) registered 43 anti-dumping cases against China. With the sharp rise in US tariffs, Chinese manufacturers may now escalate dumping in emerging economies, including India.
Meanwhile, government sources have said that the country is in touch with other major trading nations to discuss the emerging situation. India is already having free trade talks with seven countries. Government officials have said that sectors like Shrimp which have been hit hard by the new tariffs should explore new markets.
Exports to the US account for 18% of India’s total exports. India has a trade surplus of $35 billion with the US.