Trade deal with the US possible if the entire 50% tariffs on India get addressed: Official sources
New Delhi is unlikely to consider retaliation against the US
India has said that a trade deal with the US is possible only if the entire 50 per cent import tariffs imposed on its goods, including the 25 per cent penalty for buying Russian oil implemented this week, get addressed, official sources have said.
New Delhi, however, is unlikely to consider retaliation against the US as negotiations are expected to continue for the proposed India-US bilateral trade agreement (BTA) despite no communication on a fresh date from Washington, the source added.
“Addressing both the reciprocal tariffs and the additional tariffs is necessary to have an effective trade deal. Negotiating on just 25 per cent of the tariffs while not addressing the remaining 25 per cent does not seem feasible…. But as long as the negotiations are on, it is not right to talk about retaliation,” a source tracking the matter told businessline.
Things appear rocky as White House trade advisor Peter Navarro indicated in an interview on Wednesday that the 25 per cent penalty tariff on India was solely linked to the country’s continued purchase of Russian oil. These tariffs could be removed “tomorrow”, if India stopped buying Russian oil, he said.
‘Modi’s war’
Navarro also said that the Ukraine war was essentially “Modi’s war” as India was supporting Russia through oil purchases. “Everybody in America loses because of what India is doing. Consumers and businesses lose, workers lose because India’s high tariffs cost us jobs, income and higher raises. The taxpayers lose because we’ve got to fund Modi’s war,” he said.
On the matter of its continued purchase of discounted Russian oil, India has so far maintained that this was necessary to ensure affordable energy for its 1.4 billion citizens. It also accused the West of double standards as both the US and the EU were continuing to trade with Russia.
“India’s approach ought to be discussion and diversification. So far, India’s strategic patience with US unilateralism has been reasonable but going forward continued imposition of unreasonable and unjustified tariffs and sanctions may provoke retaliatory measures in proportionality and to guard the national interest . But I hope sanity prevails,” former Ambassador Anil Trigunayat told businessline.
Steep cuts
An India-US BTA has so far not happened as New Delhi refused to cross its redlines for the US, which includes providing market access for sensitive agriculture and dairy products, allowing genetically modified soyabean and cotton and bringing about steep cuts in automobile tariffs.
Earlier this month, Washington postponed the scheduled visit of its trade negotiating team to Delhi on August 25 and has not come up with an alternative date, the source said.
“While negotiations are not happening right now, the engagement is still on. Talks will happen. But we don’t have any idea how long the 50 per cent tariffs will stay,” the source said.
Adding to the uncertainty, US National Economic Council Director Kevin Hassett insisted in an interview that India has to relent. “If the Indians don’t budge, I don’t think President Trump will,” he said.
Published on August 28, 2025
