Trump’s 25% Tariff Move Expected to Have Minimal Impact on India; Agri, Dairy, GM Foods Off-Limits in Trade Talks

Trump’s 25% Tariff Move Expected to Have Minimal Impact on India; Agri, Dairy, GM Foods Off-Limits in Trade Talks

India is expected to face limited fallout from the newly announced 25% tariffs by U.S. President Donald Trump, with officials estimating that over half of Indian exports to the U.S. will remain unaffected due to existing exemptions, especially under Section 232.

Bilateral trade between the two countries reached $131.8 billion in FY 2024-25, comprising $86.5 billion in Indian exports and $45.3 billion in imports. According to government sources, only around $40–48 billion of Indian exports would be impacted by the tariffs. Key sectors affected include machinery ($9 billion), gems and jewellery ($12 billion), textiles and garments ($10.3 billion), chemicals ($2.34 billion), leather and footwear ($1.18 billion), and seafood such as shrimp ($2.24 billion).

Despite the tariffs, India remains firm on its longstanding stance: no duty concessions will be offered on agricultural, dairy, or genetically modified (GM) food products. Officials cited religious sensitivities and public sentiment as core reasons for this uncompromising position.

“There will be no compromise on these segments in any trade pact,” a senior official emphasized.

The U.S. move is largely seen by experts as a strategic pressure tactic aimed at influencing ongoing trade negotiations, which began in March. Five rounds have already been held, with a sixth round scheduled in New Delhi on August 25.

Trump has also threatened additional penalties for India’s continued imports of Russian crude oil and arms. In a post on Truth Social, he criticized India and Russia as “dead economies,” stating, “I don’t care what India does with Russia. They can take their dead economies down together.”

In response, India’s Commerce Minister Piyush Goyal reaffirmed that national interest will remain the guiding principle in trade talks. “We’ve risen to become one of the top five economies through reforms and the efforts of our farmers, MSMEs, and entrepreneurs,” he told Parliament. “India will become the third-largest economy in a few years.”

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