India’s pre-emptive moves to shield itself from US President Donald Trump’s decision to impose global retaliatory tariffs by stepping up negotiations with Washington and slashing import duties are seen as sufficient to forestall a damaging escalation in bilateral trade tensions. Trump has announced that the reciprocal tariffs will be applied globally without exemptions on Wednesday, impacting all trading partners, including India. The measure is aimed at matching the higher tariff rates that Washington’s trade partners impose on US exports. Last month, the Trump administration announced 25 per cent tariffs on imports from Mexico and Canada, along with fresh duties on Chinese goods. India has also come under Trump’s scrutiny because its import tariff rates are among the highest in Asia-Pacific. On Monday, Karoline Leavitt, the White House press secretary, listed India as one of the countries that imposed high tariffs on US goods. Leavitt told reporters: “It’s time for reciprocity, and it’s time for a president to make a historic change, to do what’s right for the American people.” Despite the threat of blanket tariffs, the US was unlikely to target India immediately, analysts said. New Delhi’s recent tariff cuts and diplomatic overtures – coupled with the prospect of a bilateral trade agreement in September – would likely have convinced Washington to hold fire on such a move, at least for now, they added. During a visit to the White House in February, Indian Prime Minister Narendra Modi proposed increasing two-way trade to US$500 billion by 2030. This projection represents a fourfold increase from US$118 billion in the 2024 financial year when India recorded a surplus of US$32 billion in its trade with the US. Modi has also invited Trump to attend the next meeting of the Quad – a grouping of the US, India, Australia and Japan – to be held in New Delhi in September. Vivek Mishra, deputy director of the strategic studies programme at the Observer Research Foundation, said a trade agreement between the two countries could emerge from the meeting. “He [Trump] has to wait until September because negotiations are on. It’s a massive issue,” he said. The US administration would maintain pressure on India because “it’s his tactic for negotiations,” but it was unlikely to involve drastic measures by Washington that could “derail the talks”, Mishra said. “So long as we can tell Trump that we have reduced tariffs in so many sectors, then we will be fine.” India has struck a conciliatory tone over Trump’s trade demands by announcing a lowering of import tariffs on goods such as Harley-Davidson motorcycles, electronics and textiles during its annual federal budget in February. Delhi has also slashed import tariffs on bourbon whiskey to 100 per cent from 150 per cent, a move which is expected to benefit businesses like the popular American brand Jim Beam. Indian Commerce Minister Piyush Goyal last month visited Washington, where he met US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick. Subsequently, a US delegation led by Assistant US Trade Representative for South and Central Asia Brendan Lynch visited India to discuss the terms of the trade agreement, according to Indian media reports. The agreement would likely aim to address tariff imbalances, but delicate issues such as the immigration of Indian professionals to the US and exports of IT services are unlikely to fall under its scope, according to a report by Dutch banking giant ING released last month. “Based on Trump’s recent comments, we anticipate that agriculture, pharmaceuticals, textiles, automobiles, and energy – sectors that make up approximately 50 per cent of India’s total exports – will be the primary focus,” it added. ING noted that negotiations on certain sectors, such as agriculture, were bound to be tricky because half of India’s population was reliant on farming for a livelihood, and any significant changes could blow up into a political issue. “However, we think there’s scope for India to increase market access for US agricultural exports to India. The US is a huge exporter of cotton, corn and soybeans; India imports these commodities, and these three main crops could be around which discussions revolve,” the report said. Trump’s hardline stance expected While it was hard to predict Trump’s next moves, talks on the bilateral trade issues had started, and as such, he should not impose tariffs on India in the meantime, said T.S. Vishwanath, a principal adviser at international trade consultancy ASL-Legal in Delhi. “You can’t have a trade agreement under duress. An eye for an eye is not a solution in trade,” Vishwanath said. On India’s part, there was a strong possibility that it would lower import tariffs on products of interest to the US in the hope that Trump would spare India from retaliatory tariffs, he added. Biswajit Dhar, a distinguished professor at the Council for Social Development in New Delhi, said that it would be a mistake to judge the direction of Trump’s policies based on whether or not he would impose retaliatory tariffs on any country on Wednesday because he was “extremely unpredictable”. But it was clear Trump was determined to reduce trade imbalances between the US and its partners, he said. “High-tariff countries will be forced to reduce tariffs. India will have to reduce its tariffs.” Trump would not hold trade talks with India based on mutual benefit as he had pledged to American voters that he would protect their interest and that of US businesses, Dhar said. As such, India might become a target if Trump were to take a hard stance on issues such as intellectual property protection, he added.