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Below the Quote on India - U.S. Trade: Navigating Tariff Uncertainty by Dr. Manoranjan Sharma, Chief Economist at Infomerics Valuation and Ratings

Revisiting Tariffs, Recalibrating Strategies: An Indian Prism

Donald Trump’s contradictory signals complicate the prospect of a straightforward U.S.-India trade negotiation. While he hints at a willingness to engage New Delhi, his calls for the EU to impose 100% tariffs on Chinese and Indian goods, alongside his own proposal to double tariffs on Indian imports to 50%, undercut credibility and trust. For India, this raises the risk of entering agreements that may be swiftly undone by sudden U.S. policy reversals.

Against this backdrop, India is adopting a cautious and calibrated stance. The priority is to secure clarity on market access in critical sectors-textiles, gems and jewellery, pharmaceuticals, and automotives-while avoiding “MASALA deals” (Mutually Agreed Settlements Achieved through Leveraged Arm-twisting). With tariff hikes already weighing on exports and GDP projections, India seeks strategic relief and predictability, not short-term concessions.

This environment presents both challenges and opportunities. India can leverage the reset to push for durable arrangements - tariff reductions, phased rollbacks, and robust safeguards, such as dispute resolution mechanisms - to mitigate the risk of U.S. policy volatility. Building on the “Mission 500” vision of doubling bilateral trade to $500 billion by 2030, India must also address persistent non-tariff measures (NTMs), including customs valuation rules, import licensing, pre-shipment inspections, rules of origin, and trade-related investment measures. The way forward lies in combining resilience with innovation: new strategies for new realities.

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