India seeks bilateral trade deal with US, avoids immediate retaliation over tariffs

India is pushing for a bilateral trade agreement with the US, choosing not to impose immediate retaliatory tariffs in response to recent trade tensions.

Senior Indian government officials have signaled that New Delhi puts bilateral trade negotiations with Washington first among its international economic priorities — intending to seal the deal by fall 2025. The aim is to lower the tariffs, not to escalate trade friction.

According to government officials, India aims to engage in dialogue that addresses mutual concerns and promotes a fair trading environment.

In contrast, China has swiftly responded to the latest round of US tariffs with a more aggressive move—imposing a sweeping 34% tariff on American goods, a broader response compared to its previous retaliatory actions.

Beijing had responded to previous levies swiftly but moderately, imposing retaliatory tariffs on targeted US imports, including agricultural products and fuel, while taking action against certain American firms and ramping up export controls. 

India sees a strategic opportunity amid this growing trade friction among major economies. With its neighbors embroiled in tariff battles, New Delhi aims to present itself as a stabilizing force—positioning the country as a reliable partner committed to regional peace and economic cooperation.

India and the US are moving closer to a trade deal

Prime Minister Narendra Modi of India and President Trump agreed on a deal last month to start formal discussions on a bilateral trade agreement during a recent visit to Washington. The two sides hope to finalize negotiations by fall 2025.

The proposed agreement is anticipated to cover many topics, including but not limited to tariffs, services, agricultural access, technology transfers, and intellectual property rights. The aim, Indian officials say, is a fair and balanced deal.

India has also already granted some concessions in earlier talks. Last month, India broke a large piece of ground, signaling it was willing to lower import duties on American goods during a visit to New Delhi by a US trade delegation.

In negotiations, officials emphasize that all sectors — goods and services — are on the table. The government is also in consultation with exporters who could be affected by the new US tariffs and is ready to help them if necessary.

India adopts new export strategy as global regime shifts

India’s drive for a trade deal is part of a larger push to cement its role in global manufacturing and exports. One of those bright spots has been the production of smartphones, particularly iPhones.

Apple has greatly intensified its operations in India. Analysts believe up to a quarter of global iPhone production will soon be produced in Indian factories. That trend mirrors a worldwide pivot away from China and a growing role for India as a manufacturing country.

India’s business leaders are pressing the government to swiftly seal a trade deal with the US to keep this momentum going. An agreement would secure continued investment and reduce the tariff’s bite.

On the other hand, the Indian stock market has been relatively resilient. The NSE Nifty 50 Index has outperformed many other Asian markets, a sign investors are breathing easy with India’s measured response.

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