US-India pitch for fair bilateral trade agreement amid Trump’s reciprocal tariffs

India’s External Affairs Minister S. Jaishankar and US Secretary of State Marco Rubio held a call on Monday to discuss how to move forward with the ongoing India-US Bilateral Trade Agreement (BTA) talks.

The discussion happened shortly after US President Donald Trump announced major tariffs on many countries, including India. The new tariffs will impose a 26% tax on all Indian imports to the US.

The initial 10% base rate was implemented on April 5, while the remaining 16% will be implemented on April 9. These reforms have rattled financial markets across the globe. In India, both Sensex and Nifty declined by over 3% in a day on Monday.

A statement from the US State Department said, “They also discussed US reciprocal tariffs on India and how to make progress toward a fair and balanced trade relationship.”

On X, EAM Jaishankar posted, “Good to speak with US Secretary of State Rubio today.”

“(We) agreed on the importance of the early conclusion of the Bilateral Trade Agreement. (I) look forward to remaining in touch,” he added.

Negotiations on the BTA are underway. The latest round was held in Delhi from March 26 to 29. In this session, both countries’ trade officials agreed on the key points for future talks.

India hopes for a positive outcome

The recent tariff change by the US has triggered a lot of anxiety amongst its trading partners. President Trump stated that the US will impose a 10% base tariff on all imports and additional duties on some countries, including major US allies. This has generated uncertainty in international trade and caught many across the world by surprise.

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However, India has still not retaliated with tariffs of its own. Officials have indicated they are working toward completing the first phase of the BTA before the end of this year. An effective agreement is expected to prompt the US to lower or scrap the new tariffs.

If agreed, this might also open up increased access to American goods in Indian markets.

The Commerce Ministry released a statement saying that it is “studying” the new US tariffs carefully.

Higher tariffs could cost India billions in exports

India’s exports to the US could decline by $5.76 billion this year if the complete 26% tariffs are levied, revealed a study by the Global Trade Research Initiative (GTRI). The additional taxes will apply to numerous Indian products, excluding pharmaceuticals, semiconductors, and some energy products.

The initial 10% tariff is already in place, and the remaining is to be imposed shortly.

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