India adopts wait-and-watch approach amid US tariff uncertainty
Rajesh Agarwal, chief negotiator for the India-US bilateral trade agreement and special secretary in the ministry of commerce, said it was too early to devise a contingency plan in the absence of clarity from the US on the scope and impact of the new measures.
'Any backup plan has to be based on actual developments. As of today (15 July), it is too early to estimate how the differential tariffs will play out from 1 August,' Agarwal said during a media briefing following the release of the latest monthly trade data.
'The US has listed new tariffs covering around 25 countries, including the EU (European Union), and has also spoken about finalising some trade deals. But the full spectrum of the tariff rollout is still unclear,' he added.
'Both sides (India and the US) are working according to the terms of reference agreed upon during the first visit of the US team in March' for discussions on the bilateral trade agreement, he said.
Commerce Secretary Sunil Barthwal said there was no clarity yet on the timeline or actual enforcement of the US's reciprocal tariffs.
'So far, except for China, all countries are facing the same 10% base tariff along with sector-specific tariffs on steel, aluminium, and auto components,' Barthwal said, speaking to the media. 'These tariffs have only been announced, they haven't been implemented yet. And we don't have clarity on when exactly they will be enforced.'
He added that India's steady export performance in such an environment reflected the effectiveness of the government's policy framework.
'Our export markets remain stable, and our strategy continues to focus on select sectors and services,' Barthwal said.
Agarwal added that the government is closely tracking US import patterns. 'While overall tariff collections have increased, US imports haven't seen a major decline outside the sectors directly affected, such as metals and automobiles,' he said.
India-US trade entered a challenging phase after US President Donald Trump announced steep reciprocal tariffs in April, affecting around 87% of Indian exports.
Key sectors such as electronics, gems and jewellery, textiles, rice, spices, and processed foods will face higher duties when the tariffs kick in.
Agarwal said Indian industry has begun engaging with their US counterparts and importers to assess potential impacts and adjust strategies.
'We need not worry at this stage. We will assess the situation as it unfolds, and the government will step in with necessary measures as needed,' he added.
Despite the reciprocal tariff setback, the US remains one of the few countries with which India maintains a strong merchandise trade surplus.
In 2024-25, Indian exports to the US rose 11.6% to $86.51 billion, while imports grew 7.4% to $45.33 billion, pushing the surplus to $41.18 billion.
Another senior official said India and the European Union will hold the next round of negotiations on their proposed free trade agreement (FTA) in the first week of September, following an exchange of offers in the services sector last week.
'The 12th round of talks concluded last week in Brussels. We have exchanged our offers on services and non-services,' said L. Satya Srinivas, special secretary in the department of commerce.
'There were discussions on that, along with key interests in market access for goods,' he added.
Negotiations for a comprehensive FTA with the EU, including pacts on investment protection and geographical indications, were relaunched in June 2022 after an eight-year hiatus.
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