India-US Trade Deal: India and the US are having a lot more trouble with trade since US President Donald Trump said that trade talks with India would be put on hold. This happened after Washington decided to put 50% tariffs on Indian products, with 25% being a “reciprocal tariff” and the other 25% being because India kept buying Russian oil.
When reporters asked if talks could start up again, Trump said, “Not until we get it resolved.” This is a big loss for one of the world’s fastest-growing trade partnerships between two countries.
How does it affect India’s economy?
India sent $87 billion worth of goods to the U.S. in 2024, making it one of its biggest export markets. Pharmaceuticals, linens, gems, petrochemicals, and IT services are just some of the industries that are at risk because of the new tariff system. Economists say that if the standoff lasts longer, it could cut India’s GDP by up to 2%.
- One thing India could do is change the way it imports energy to depend less on Russian oil.
- Talking about lowering some tariffs on important U.S. goods, like almonds and dairy products.
Getting stronger in other trade ties to lessen the impact
Even though they are under a lot of pressure, Indian officials say that energy security is a must, especially since oil prices are so volatile around the world.
Undercurrents of strategy and politics
The U.S. says the tariffs are a way to promote “fair trade,” but many analysts see them as a geopolitical tool meant to bring New Delhi closer to American strategic goals.
The Modi government, on the other hand, seems set on keeping its policy independence and is looking for ways to balance its relationship with the U.S. with growing ties with other economic partners.
Trade Talks With India on Hold, Is the New World Order On Cards?
The trade dispute between the U.S. and India happens at a time when BRICS (Brazil, Russia, India, China, and South Africa) is actively looking for ways to improve trade within the group, invite more countries to join, and settle more transactions in local currencies.
India’s dislike of U.S. pressure could make it more active in BRICS, especially on issues like trade de-dollarization, which means using less U.S. currency.
- Working together with Russia and Brazil on energy issues can help the West’s supply problems.
- Even though there are problems at the border, there is a strategic agreement with China on some economic issues.
Experts say that these kinds of actions could be the start of a new world order in which emerging economies question the West’s traditional control over global trade.
It will be interesting to see how far New Delhi is willing to go to change its trade policy and whether BRICS becomes its first choice for building a different economic future.
