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How India Plans to Gain from Trump’s Tariff War with China and the World

India prioritising talks over tit-for-tat tariffs amid global market meltdown

TFI Desk by TFI Desk
7 April 2025
in Geopolitics, Trending
How India Plans to Gain from Trump’s Tariff War with China and the World

How India Plans to Gain from Trump’s Tariff War (Image Source - India Today and AI generated image created by TFI staff)

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India unlikely to announce counter tariffs on USA: The announcement of Trump tariffs have triggered a bloodbath across all the major trading markets across the world. The Indian market has nosedived, with NIFTY currently fluctuating at a loss in the 3-4% range. As per reports, more than 20 lakh crores worth of valuation has been eroded from the Indian trading markets, BSE and NSE. 

Since the so-called ‘Liberation Day’, China has retaliated by announcing 34% counter tariffs, with reports suggesting Europe could also follow suit. The imminent possibility of a to-and-fro announcement of tariffs cast a pale shadow with fear of global recession gripping the world. Several analysts, painting a doomsday scenario, predict global market bloodbath on the lines of infamous Black Monday which took place in 1987. However, Indian media citing officials have reported that the Indian government is prioritising talks over tit-for-tat response. 

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According to media reports, the Indian government is unlikely to impose counter-tariffs on the United States as it is keen on finalising the bilateral trade agreement as quickly as possible ever since the Trump administration imposed 26% tariffs on exports from the country, a government official told Reuters. 

The government official stated that the Modi government is banking on a key clause in the executive order signed by Trump last week that offers respite to nations who take “significant steps to remedy non-reciprocal trade arrangements”. 

Another government official stressed that India was taking comfort in the fact that it was one of the first nations to have started talks on a trade deal with the US. 

On the contrary, India’s Asian peers have been hit by higher tariffs by the Trump administration, with China (34%), Vietnam (46%), and Indonesia (32%).

China, on its part, has announced that it would impose reciprocal 34% tariffs on all imports from the US from April 10, whereas Indonesia said that it would not retaliate. 

Emerging as a manufacturing and export alternative to China, Vietnam has agreed to cut down its tariffs to zero in a potential trade deal with the USA. 

On the so-called Liberation Day (2nd April), Trump imposed a 26% reciprocal tariff on India despite heaping praise on the Indian Prime Minister Narendra Modi, calling him a “great friend”.

Incidentally, the Indian government’s decision to not engage the Trump administration in tit-for-tat tariffs stems from its belief that there are several silver linings in the ongoing trade war, with the US virtually taking on all major global economies. India aims to make the most of this situation by shunning the temptation of one-upmanship and braggadocious posturing.

Also Read: Explainer: How did Donald Trump come up with ‘discounted’ reciprocal tariffs for countries

These silver linings are currently visible in the form of the US exempting the Indian semiconductors, copper and pharmaceuticals from tariffs. 

India supplies nearly half of all generic medicines to the United States. However, exports in other sectors like electronics, auto parts, gems and jewellery may take a hit which the Modi government wants to iron out through discussions over trade pact. 

Tags: Black MondayGlobal MarketIndia US trade talksIndianNiftyshare markettariffsTrumpTrump Reciprocal tariffstrump tariffs
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