India’s strategic approach to U.S. tariffs: A diplomatic stance

April 7, 2025 Hot from the Oven Valli Sarvani

Amid rising global concerns over U.S. tariffs, India has chosen not to retaliate against U.S. President Donald Trump’s 26% tariff on imports from the country.

This decision comes as India continues to engage in ongoing trade talks with the U.S., positioning itself strategically in the evolving trade landscape.

Some sources revealed that India is exploring a clause within Trump’s tariff order that could offer potential relief.

This clause allows trading partners to avoid tariffs if they take “significant steps” to remedy non-reciprocal trade arrangements.

Unlike many regional competitors like China, Vietnam, and Indonesia, which have been impacted by higher U.S. tariffs, India sees itself ahead in the trade negotiation race.

India’s proactive approach to discussions with the U.S. puts it in a better position compared to these nations.

These sources also emphasized that India’s early engagement with the U.S. trade talks strengthens its position, providing it with an edge in securing favourable terms.

India has joined countries such as Taiwan and Indonesia in avoiding counter-tariffs after Trump’s tariff announcement.

These nations have decided against escalating the situation by imposing tariffs in retaliation, despite the U.S.’s action causing disruptions in global markets.

Instead of engaging in a trade war, India has opted for diplomatic discussions, prioritizing long-term trade relations with the U.S. over short-term retaliation.

As part of its strategy, India is working towards a trade deal with the U.S. that could be finalized by autumn 2025.

The decision to refrain from retaliatory measures reflects India’s focus on maintaining a stable economic environment and securing a mutually beneficial agreement.

While the trade talks continue, India’s diplomatic stance aims to protect its economic interests and avoid unnecessary trade conflicts.

By choosing diplomacy over direct retaliation, India hopes to pave the way for a stronger, more balanced trade relationship with the U.S., positioning itself as a key player in global trade negotiations.

Image Credit: Aksharmamlcbjp, CC BY-SA 4.0, via Wikimedia Commons