Though officials indicate that a trade deal with the US is close, President Donald Trump’s Greenland-related tariffs on eight European countries highlight the need for greater caution on India’s part. New Delhi must safeguard its strategic autonomy and build adequate protections into any trade agreement, experts said.
An agreement with the US is important as it remains the largest market for Indian goods despite the imposition of 50% tariffs. “India’s exports to the US are still holding up so there is little need to panic or expedite the trade negotiations. The negotiators should also aim to build in safeguards in the deal to guard against reversal of concessions,” a senior industry official said.
In the April-December period, India’s exports to the US rose 9.74% year-on-year (y-o-y) to $65.88 billion. Some of this growth can be attributed to shipments in April-August, when additional tariffs were not in force. Exports to the US fell in September and October before recovering in November and December.
Resilience Amid Tariffs
The main driver of growth has been smartphones, with shipments to the US rising 200% y-o-y in April-November to $12.5 billion. While some sectors like apparel may be suffering but for the country as a whole the US tariffs are not a disaster,” another industry official added.
“The US Supreme Court long awaited verdict on legality of Trump tariffs is another issue that should be on the minds of Indian negotiators, If tariffs are overruled it will be another factor to weigh in the talks,” he added.
In trade talks with the US, on offer for India is relief from 50% tariffs imposed through an executive order and reduction in regular Most Favoured Nation (MFN) tariffs. The MFN tariff concession will be of more permanent nature.
Greenland Precedent
The 10% tariffs announced on Saturday by the Trump administration on Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland for opposing a US takeover of Greenland come despite trade deals with these countries having been signed last year.
“For Europe, the message is unmistakable: even recent trade deals offer no protection from new US tariffs,” founder of Global Trade Research Initiative (GTRI) Ajay Srivastava said.
The US tariffs will take effect on February 1 and rise to 25% on June 1, remaining in place until the US secures what Trump has called the “complete and total purchase of Greenland”. In 2025, the UK had negotiated 10% tariffs and the European Union 15% after the US threatened reciprocal measures.
For India, the implications are immediate. Under sustained US pressure, New Delhi has already taken costly steps, including withdrawing from a Brics naval exercise involving Russia, China, Iran and South Africa; stepping back from the Chabahar port after decades of investment; and halting oil purchases from Iran and Venezuela while sharply cutting imports from Russia. Yet despite these concessions, US pressure on India remains relentless in trade negotiations and public forums, Srivastava said.
The Greenland episode offers a clear lesson to India: trade deals with the US are not a shield against coercion. Tariffs and sanctions can be reimposed regardless of agreements. India should therefore avoid making unilateral concessions to the US—on energy sourcing, regional projects, technology platforms, or strategic alignments—in the expectation that a trade deal will buy stability, he said.
While other US partners facing similar pressure, such as Canada and Australia, are leaning more towards China, India has limited scope to pivot in that direction for strategic reasons, despite large trade flows between the two countries.