India refuses to play 'dead economy'. Will Trump back off?

Economic Times

2 days ago

The United States' imposition of 25% tariffs on Indian goods has drawn a measured but clear response from India. Commerce Minister Piyush Goyal's remarks, issued in the wake of President Donald Trump's tariff announcement and disparaging comment calling India a 'dead economy,' were more than defensive. They were strategic, confident and unmistakably defiant. India has drawn its red line, and the message is clear: it will not be pressured into an unfavourable trade deal.The question now is whether the US will back off or recalibrate its approach, recognizing that India will not negotiate on unequal terms or under coercion.
Goyal's statement, a quiet strategic assertionUnlike the rough words Trump used against India while announcing the tariffs, Goyal's statement that India gives 'utmost priority' to protecting farmers, labourers, entrepreneurs, exporters, and other industrial stakeholders was a quiet declaration of India's trade posture to the world, in addition to domestic assurance. By emphasising that India will not sign deals under deadlines or pressure, he framed the country's response not as reactive, but as anchored in policy consistency and sovereign decision-making.Goyal also responded directly to Trump's calling India a "dead eocnomy" by asserting that India is not only the world's fastest-growing major economy, but will soon become the third-largest. This was a clear signal that India rejects the idea of being treated as a subordinate in global trade relations. It will engage but on equal footing.This rhetorical stance has important strategic consequences. In the realm of global diplomacy, perception is power. Goyal's articulation projected India not as a defensive partner on the backfoot, but as an assertive, confident global economy that deamnds respect and parity in negotiations.
A red line, but not an unreasonable one
While agriculture and dairy access remains a contentious issue, particularly the US push to export GM crops and meat-fed dairy, India's opposition is grounded in economic, regulatory, health and political logic. With vast numbers of small-scale farmers and a fragile rural economy, opening the gates to heavily subsidised US agri-products could destabilise a politically sensitive sector.India has not rejected trade reforms outright. It has signaled willingness to negotiate, but not on terms that threaten domestic livelihoods or regulatory autonomy. This is not blanket protectionism, but an insistence on fair trade rooted in local realities.Also Read | India's $68 billion question: How to trade with Russia without making America unhappy
Has Trump boxed the US into a corner?By publicly deriding India and slapping tariffs on its exports, Trump may have overplayed his hand. Rather than pushing India toward compromise, his comments have likely made it politically impossible for New Delhi to be seen as yielding. India now finds itself in a position where public perception, domestic politics and economic strategy all align in favour of resistance. Yielding to US demands would not only be unpopular at home, it would be interpreted as strategic weakness abroad too.The US, too, has much to gain from deeper trade ties with India particularly as it seeks to diversify supply chains away from China and tap into India's growing consumer market. With India making it clear that unilateral pressure tactics won't work, Washington may be forced to rethink its strategy. The US could either entrench further, risking a prolonged standoff, or shift to a more diplomatic, respect-based dialogue to find common ground.
Also Read | Pivot to Pakistan: Is Trump ditching Delhi for its enemy? The world may come to see India's firmness not as obstructionism or intransigence, but as a sign of a maturing power that cannot be steamrolled. If the US wants a meaningful, long-term economic relationship with India, it may have to abandon the current posture of economic intimidation.
India has made its stance abundantly clear. It seeks trade partnerships based on fairness, mutual benefit and strategic respect. Goyal's statements underscore that India is no longer a pliant participant in global trade talks. It is assertive, self-assured and unafraid to walk away from deals that compromise core interests. The US now faces a decision -- either continue to press India with tariff threats and harsh rhetoric, or shift toward a cooperative approach that respects India's sovereign choices. If it chooses the latter, there remains strong potential for a new trade agreement that strengthens both economies. But if it clings to hardline demands, it risks isolating one of the world's fastest-growing markets and a critical geopolitical partner. The ball is now in America's court. India's response to Trump's tariffs has demonstrated that it is unwilling to buckle under pressure. Goyal's firm words reflect a broader shift in India's global stance: measured yet assertive. What remains to be seen is whether the US, recognising this new reality, is willing to adjust its tactics and engage India with the respect it demands. In the high-stakes world of global trade, coercion rarely works in the long term.