Donald Trump tariffs: India wants the US to slash duties for labour-intensive sectors

With Union Minister of External Affairs S. Jaishankar doubling down that the bilateral trade agreement (BTA) with the United States must be mutually beneficial, latest reports state that India looks to the US to slash tariffs for labour-intensive sectors, such as textiles, apparel, and manufacturing.

“India is one of the highest tariff nations in the world. It is very hard to sell in India. They have offered us a deal where basically they are willing to… literally… they charge us no tariff. We go from the highest tariff… you could not do business in India, we are not even in the top 30 in India because the tariff is so high… to a point where they have actually told us that there will be no tariff,” Trump said in Doha. This sent the Indian stock market benchmark to seven-month highs in the second half of Thursday.

Jaishankar was quick to respond, albeit indirectly, stating that “any judgment on [the trade talks] would be premature.”

“Between India and the US, trade talks have been going on. These are complicated negotiations. Nothing is decided till everything is. Any trade deal has to be mutually beneficial; it has to work for both countries,” the external affairs minister said.

Union Minister of Commerce and Industry Piyush Goyal is set to meet a high-level US delegation as part of the bilateral trade discussions soon. Goyal is scheduled to discuss the BTA with US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick, among others. This would be in tandem with India’s chief negotiator Rajesh Agarwal ironing out the technical hiccups in the BTA.

The trade pact, once in force, is expected to slash tariffs, remove non-tariff barriers, and provide trade clarity on the rules of origin.

Indian exports to the United States jumped significantly by 27.3 per cent to $8.42 billion in April 2025, according to the latest data by the Ministry of Commerce. Imports rose, too, by a massive 63.76 per cent to $5.24 billion.

A significant portion of this jump could be attributed to India’s exporters fulfilling deliveries when Donald Trump announced reciprocal tariffs on India on April 2. Later, the tariffs were suspended till July 9. However, all eyes are on the trade agreement, as many exporters hope for it to improve US-India trade relations.

UN cuts India economic growth outlook adding to tariff woes

The United Nations in its report launched on Thursday cut India’s economic growth forecast for 2025 to 6.3 per cent. However, the multinational organisation acknowledged that despite the cut, India was still one among the fastest-growing large economies. This was due to healthy government spending and robust consumption trends.

With the release of the report, The World Economic Situation and Prospects as of mid-2025, the UN also stated that the exemption of US tariffs on pharmaceuticals, electronics, semiconductors, energy, and copper might significantly soften the blow of the United States action, However, it did not that such exemptions could change at any moment.

India might take the impact of tariffs, but other developing economies might suffer. Li Junhua, UN Under-Secretary-General for Economic and Social Affairs, said. “The tariff shock risks hitting vulnerable developing countries hard, slowing growth, slashing export revenues, and compounding debt challenges, especially as these economies are already struggling to make the investments needed for long-term, sustainable development.”

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