India unlikely to retaliate against Trump s tariffs as deal talks progress sources say

NEW DELHI - India does not plan to retaliate against US President Donald Trump’s 26 per cent tariff on imports from the Asian nation, an Indian government official said, citing ongoing talks for a deal between the countries.

Prime Minister Narendra Modi’s administration has looked into a clause of Mr Trump’s tariff order that offers a possible reprieve for trading partners who “take significant steps to remedy non-reciprocal trade arrangements”, said the official, who declined to be named as details of the talks are confidential.

New Delhi sees an advantage in being one of the first nations to have started talks over a trade deal with Washington, and is better placed than Asian peers such as China, Vietnam and Indonesia, which have been hit by higher US tariffs, a second government official said, also declining to be named.

In the days after Mr Trump’s tariff announcement that has shaken global markets to their core, India joined nations such as Taiwan and Indonesia in ruling out counter tariffs, even as the European Commission prepares to hit US products with extra duties following China’s retaliation.

India and the US agreed in February to clinch an early trade deal by autumn 2025 to resolve their stand-off on tariffs.

The Indian Prime Minister’s Office did not immediately respond to an e-mailed request for comment.

Reuters reported in March that New Delhi is open to cutting tariffs on US imports worth US$23 billion (S$31 billion).

Mr Modi’s administration has taken a number of steps to win over Mr Trump, including lowering tariffs on high-end bikes and bourbon, and dropping a tax on digital services that affected US tech giants.

Mr Trump’s tariffs could slow India’s economic growth by 20 to 40 basis points in the ongoing financial year and may cripple India’s diamond industry, which