"Premature talk, too early": Trump's claim of Modi govt agreeing to cut tariff draws response from Indian officials

Talks between India and the United States regarding a trade deal have only just commenced, which makes it too early to discuss specifics such as tariff reductions, news agency PTI quoted Indian government sources as saying on March 8. This statement followed comments made by US President Donald Trump, who asserted that India had consented to significantly lower tariffs on American products.

Both nations naturally possess their own "interests and sensitivities," which are valid topics for discussion, PTI quoted the sources as saying further.

It may be noted that last month, after discussions between Prime Minister Narendra Modi and Trump in Washington DC, India and the US agreed to initiate negotiations on a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA), with the goal of completing the first phase by the autumn of 2025. Commerce Minister Piyush Goyal visited the US from March 3 to 6 to engage with his American counterpart and the US Trade Representative regarding the trade deal.

Trump's declaration on Friday that India had agreed to substantially reduce tariffs was interpreted by New Delhi as an overstatement. During a White House briefing, Trump remarked, "India charges us massive tariffs, you can't even sell anything in India, it's almost restrictive... By the way, they have agreed to cut their tariffs way down now because somebody is finally exposing them for what they have done."

When asked about Trump's comments during a media briefing on Saturday, Foreign Secretary Vikram Misri refrained from providing specifics. "I will not get into that at this point of time because these are ongoing discussions, so it would not be right to get into it," he stated.

However, Misri noted that tariff liberalisation has been fundamental to several bilateral trade agreements India has finalized in recent years. "There are ongoing discussions with several other partners on these issues now, and I think the ongoing discussions should be seen in that context as well," he added.

In alignment with his "America First" policy, Trump announced this week that reciprocal tariffs would be imposed starting April 2 on nations that maintain higher tariffs on US imports. This tariff dispute has raised concerns about a potential global trade war, with many countries already implementing countermeasures in response.

Indian government sources indicated that discussions on tariffs and other trade-related matters, which were prominent during Modi's visit to Washington DC, are part of an ongoing process. The sources highlighted that while specifics are being discussed, it would be premature to delve into details at this stage. They emphasized that there is context for each aspect of the negotiations that reflects both countries' interests.

The sources also recalled previous discussions between India and the US regarding a limited trade deal during Trump’s initial term, which ultimately did not yield results. In recent years, India has significantly lowered its average applied tariffs for key developed nations such as Australia, the UAE, Switzerland, and Norway through recently finalized bilateral trade agreements. Similar negotiations are currently in progress with the European Union and the UK, which should also inform the ongoing talks with the US.

While India has not directly responded to Trump’s announcement regarding reciprocal tariffs, it expressed a commitment to enhancing trade relations with the US, including reducing tariff and non-tariff barriers as part of the bilateral trade agreement.
External Affairs Ministry spokesperson Randhir Jaiswal said, “Our objective through the BTA is to strengthen and deepen India-US two-way trade across the goods and services sector, increase market access, reduce tariff and non-tariff barriers, and deepen supply chain integration between the two countries.”

Since taking office on January 20, Trump has repeatedly criticised India for its high tariffs, labeling the nation as a "tariff king" and "tariff abuser." In its Union budget for 2025-26, India announced plans to lower tariffs on Bourbon whiskey, wines, and Electric Vehicle (EV) segments, signaling to the Trump administration its willingness to reduce tariffs in specific sectors.

Washington is also encouraging New Delhi to increase its purchases of American oil, gas, and military equipment to help reduce the trade deficit, which currently stands at approximately USD 45 billion in India's favour, PTI's report. The US remains India's largest trading partner, with total bilateral trade in goods and services reaching USD 190 billion in 2023. In the financial year 2023-24, the US ranked as the third-largest source of foreign direct investment (FDI) in India, contributing USD 4.99 billion, which accounts for a significant portion of total FDI equity inflows.