Trade talks between India and the United States are currently on hold. Officials from India’s Commerce Ministry have said that discussions can only resume if the US removes its additional 25% tariff on Indian exports.
The US has now imposed a 50% tariff on Indian goods, which came into effect this week. This is expected to affect more than half of India’s $87 billion exports to the US in 2024-25. Industries such as textiles and chemicals are likely to be hit hardest.
Talks were earlier planned in New Delhi on August 25, but the US put them on hold after President Donald Trump raised concerns about India’s oil imports from Russia.
Exporters fear that higher tariffs will slow down orders from the US, creating cash flow problems for many companies. To ease the pressure, the government is considering support measures, but not in the form of direct subsidies. Instead, officials say they are looking for long-term solutions to strengthen industries.
On Thursday, a delegation from the Federation of Indian Export Organisations (FIEO) met Finance Minister Nirmala Sitharaman to explain the difficulties exporters are facing. FIEO has asked the government to introduce quick relief measures. One proposal is to share part of the tariff burden between industry and government, similar to the earlier MEIS scheme.
Officials also said the situation is a reminder that India needs to diversify its export markets and not depend too heavily on just a few countries.
