NEW DELHI: In response to US President Donald Trump's announcement of imposing reciprocal tariffs on India starting April 2, the Ministry of External Affairs reiterated that both countries are negotiating a multi-sector trade deal aimed at addressing tariff and non-tariff barriers while enhancing market access.
Unlike some countries, India has avoided a tariff war against the US and has maintained that the ongoing trade pact negotiations will address both tariff and non-tariff measures in a manner acceptable to both sides.
However, the sweeping reciprocal tariffs will make the road ahead for a trade pact bumpy. “During the Prime Minister’s visit to the US in February 2025, both sides announced plans to negotiate a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA). The Commerce and Industries Minister was in the US and met his counterparts,” MEA spokesperson Randhir Jaiswal said.
“The two governments are in the process of advancing discussions on a multi-sector Bilateral Trade Agreement. Our objective through the BTA is to strengthen and deepen India-US two-way trade across the goods and services sector, increase market access, reduce tariff and non-tariff barriers, and deepen supply chain integration between the two countries,” he explained.
In his first address of his second term to a joint session of Congress, President Trump defended his strict tariff policies, emphasizing that the U.S. has long been subjected to high tariffs from several countries, including India. He announced that his administration would begin imposing reciprocal tariffs on multiple countries starting April 2.
“On average, the European Union, China, Brazil, India, Mexico, and Canada—have you heard of them?—and many other nations charge us much higher tariffs than we charge them. It’s very unfair,” Trump had said.
Meanwhile, the recent fluctuations in Trump’s tariff policy bring further uncertainty as well.
President Trump on Thursday suspended the 25% tariffs he had imposed earlier this week on most goods from Canada and Mexico, marking another shift in a volatile trade policy that has unsettled markets and raised concerns about inflation and economic growth.
But whether the exemptions for the two largest trading partners will expire on April 2, when Trump has threatened to implement a global system of reciprocal tariffs on all U.S. trading partners, remains to be seen.
Trump had previously referred to India as a "tariff king" and highlighted the auto sector, saying that India imposes tariffs of over 100 percent. “India charges us 100 per cent tariffs; the system is not fair to the US, it never was," he said.