India has said it will take firm steps to secure its national interest after US President Donald Trump announced a 25 per cent tariff on Indian goods, effective from August 1st.
In a statement issued hours after Trump’s declaration, New Delhi said it remains committed to protecting the interests of domestic farmers, entrepreneurs and MSMEs, while continuing trade talks with Washington D.C.
“India and the US have been engaged in negotiations on concluding a fair, balanced and mutually beneficial bilateral trade agreement over the last few months. We remain committed to that objective,” the statement said.
India noted that while it has opened up its markets to foreign players, it remains sensitive to safeguarding local stakeholders. The government highlighted the recently concluded Comprehensive Economic and Trade Agreement signed with the United Kingdom as an example of this approach.
“The Government attaches the utmost importance to protecting and promoting the welfare of our farmers, entrepreneurs, and MSMEs. The Government will take all steps necessary to secure our national interest, as has been the case with other trade agreements including the latest Comprehensive Economic and Trade Agreement with the UK,” the statement added.
Trump has repeatedly criticised India’s tariff regime, both during his first term and ahead of his second, describing New Delhi as a “very big abuser” of duties on US products.
Despite multiple rounds of talks, agriculture has remained a key sticking point, with India unwilling to fully open its farm and dairy sectors to US imports — a politically sensitive decision that no ruling party at the Centre has been ready to make.
The new tariff list targets some of India’s top export earners, including automobiles, auto components, steel, aluminium, smartphones, solar modules, marine products, gems, jewellery and select processed food and agricultural items. Pharmaceuticals, semiconductors and critical minerals have been left out for now.
Economists believe the move could push India to diversify its trade ties further, tap new markets and drive domestic reforms as global supply chains shift amid rising geopolitical uncertainty linked to Trump’s trade strategy.
However, experts estimate India’s GDP could shrink by between 0.2 per cent and 0.5 per cent if the tariffs remain in place for the rest of the 2025-26 financial year.
Earlier, Trump said India would face a 25 per cent tariff plus penalties on its exports, citing New Delhi’s continued energy ties with Russia and long-standing trade barriers.
Posting on his platform Truth Social, Trump said that although India is seen as a friend, excessive tariffs and non-monetary trade barriers have limited bilateral trade.
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