India has reportedly decided not to retaliate against US President Donald Trump’s recent move to impose a 26% tariff on imports from the country, according to a senior government official. The decision comes as New Delhi seeks to secure an early trade deal with Washington, positioning itself as a cooperative partner amid a global tariff standoff.
Officials cited a provision in the US tariff order that could exempt nations that “take significant steps to remedy non-reciprocal trade arrangements.” India hopes that ongoing talks will help it secure favorable terms, ahead of other Asian economies like China, Vietnam, and Indonesia, which have borne the brunt of the new US tariffs.
Despite mounting global tension, India has joined nations such as Taiwan and Indonesia in ruling out countermeasures, even as the European Commission prepares retaliatory duties following China’s response.
India and the US had previously agreed to finalize a limited trade deal by autumn 2025 to resolve long-standing issues on tariffs. As part of its efforts to build goodwill, the Modi government has lowered duties on US high-end motorcycles and bourbon and scrapped the digital services tax that impacted American tech companies.
However, the impact of Trump’s tariffs could still be significant. Economists warn that India’s GDP growth could slow by 20-40 basis points this fiscal year. The diamond industry, which sends more than a third of its exports to the US, is particularly vulnerable, potentially putting thousands of jobs at risk.
The Prime Minister’s Office has yet to comment on the development.