Former Finance Minister P Chidambaram struck a cautionary note on Friday — insisting that India had to strike a balance between defiance and subservience while negotiating with US President Donald Trump. The senior Congress leader also noted that it would be more difficult for New Delhi to enter into a trade agreement when compared to ‘developed countries’ such as Japan and South Korea. The remarks came even as the 25% reciprocal tariffs announced by the US came into effect on Friday.
India can’t be defiant’
“We have to maintain our position and tell the United States that we are willing to negotiate. Negotiating a trade agreement with the United States is not easy. It is painstaking. The big obstacle is that we had — and in many cases still have — is high tax. As a result of that, the trade balance between the United States and India is almost $45 billion in our favour. We can say the same thing about our trade with other countries, where the trade balances in favor of the other country. But that is part of the world of commerce… We will have to deal with it. We do not have to bend over. At the same time, we do not have to be defiant,” he said during an interview with the Indian Express.
Chidambaram also noted that some countries would find it ‘easier’ to negotiate with the US with a “wider basket of exports” and relatively free imports.
“We were a closed economy. In fact, when I took over as Commerce minister, we were completely closed. We have opened it significantly but not to the extent of developed countries. It is more difficult for us to enter into a trade agreement with the United States than Japan and South Korea,” he explained.
The former Finance Minister however cautioned against using reciprocal tariffs as a bargaining chip — in the way China has done over the past few months.
“Those are bargaining chips. China has done it. That is a kind of a bluff or bravado which President Trump also indulges in. We are not in the position to do that. We have to negotiate. We have to make it plain that we will negotiate,” he reiterated.
‘GDP will go below 6.2% in FY26 if…’
US President Donald Trump unveiled sweeping new tariffs against dozens of countries on Friday — including a 25% duty for goods from India. A report by Ventura Securities suggested that this could trigger an annual export loss of $5 billion to $6.75 billion. According to an S&P Market Intelligence report released on Friday, India’s reluctance to provide market access in the agriculture and Dairy sectors is likely to be the reason for not reaching a trade agreement. The analysis also warned that the GDP would go below 6.2% in FY26 if the tariffs remained in place beyond September 2025.