U.S.-India deal talks in progress; India unlikely to retaliate currently against Trump’s tariffs

The Indian government does not plan to retaliate against U.S. President Donald Trump’s 26% tariff on imports from the Asian nation, an Indian government official said, citing ongoing talks for a deal between the countries. Prime Minister Narendra Modi’s administration has looked into a clause of Trump’s tariff order that offers a possible reprieve for trading partners who take significant steps to remedy non-reciprocal trade agreements.

The Indian government sees an advantage in being one of the first nations to have started talks over a trade deal with Washington, and is better placed than China, Vietnam, and Indonesia, which have been hit by higher U.S. tariffs. India and the U.S. agreed in February to clinch an early trade deal by autumn 2025 to resolve their standoff on tariffs.

However, the Indian Gems & Jewellery/ Diamond industry predicts that Trump’s tariffs could slow India’s economic growth by 20-40 basis points in the ongoing financial year, and may cripple India’s diamond industry, which ships more than a third of its exports to the U.S., putting at risk thousands of jobs.