US-India Trade Talks Collapse Amid New Tariffs

• US-India Trade Talks Collapse Amid New Tariffs

• The Initial Tariff and Breakdown of Trade Talks

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• Background: Trade relations between the US and India have been strained for some time, with President Trump frequently criticizing India’s high tariffs on American goods. Despite this, a joint statement in February 2025 indicated a commitment to negotiate a Bilateral Trade Agreement (BTA).
• Initial Tariff Imposed: On August 7, 2025, the US implemented a 25% tariff on a range of Indian imports. This move came after negotiations for the BTA stalled, with a US delegation’s planned visit to India for a sixth round of talks being postponed.

Phase 2: The “Double Tariff” and US Accusations

• Second Tariff: On August 6, 2025, President Trump signed an executive order imposing an additional 25% tariff on Indian goods, bringing the total tariff to a staggering 50%.

  Reasoning: The US justified this second tariff as a penalty for India’s continued purchase of discounted Russian oil. The US government claims that India’s oil imports are indirectly financing Russia’s war effort in Ukraine. India has refuted this, stating that its oil purchases are based on market forces and are necessary for the country’s energy needs. This move is seen as a deliberate act to single out India, as other countries like China also import Russian oil but have not faced similar penalties.
• Impact on India: This 50% tariff, one of the highest the US has imposed on any country, is expected to impact approximately $48.2 billion worth of Indian exports. Labor-intensive sectors such as textiles, gems and jewelry, shrimp, and leather goods are projected to be the hardest hit, with some analysts predicting a 70% collapse in exports in these sectors and a significant number of job losses.

Phase 3: PM Modi’s Stance and Alleged Refusal to Take Calls

• German Media Reports: A German newspaper, Frankfurter Allgemeine Zeitung, reported that Prime Minister Modi refused to take at least four phone calls from President Trump in recent weeks. A similar report was carried by Japan’s Nikkei Asia. These reports claim that Modi’s refusal was a signal that India would not “bow” to American pressure.
• Context of the Refusal: The reports suggest that Modi’s unwillingness to speak with Trump was a result of his irritation over the tariffs and the way the US has handled the situation. There are also reports that Indian officials were concerned that Trump might misrepresent the outcome of any conversation, as he has allegedly done in the past regarding the India-Pakistan conflict.
• Indian Government’s Response: While neither the Indian nor US government has officially confirmed or denied the reports of the calls, an Indian diplomat was quoted saying that it is not PM Modi’s “style to negotiate details over the phone.” This indicates a preference for more formal, structured discussions rather than impromptu calls.

Phase 4: India’s Counter-Strategy

• No Retaliation, but Resilience: The Indian government has publicly stated that it will not take retaliatory measures. Instead, it is focusing on a multi-pronged strategy to cushion the economic blow.
• Measures Announced: These measures include a renewed push for the “Swadeshi” (self-reliance) movement, exploring new trade partners in Latin America and the Middle East, and considering domestic policy reforms like restructuring the Goods and Services Tax (GST) to boost internal demand.
• Financial and Logistical Support: The government is also discussing financial incentives and other forms of assistance for exporters affected by the tariffs to help them diversify their markets and remain competitive. A multi-crore “Export Promotion Mission” is also under consideration.
• US-India Trade Talks Collapse Amid New Tariffs

• Country	Tariff Imposed On	Previous Tariff Rate (%)	New Tariff Rate (%)	Impact Summary
  United States	Steel Imports from India	10	25	Increased costs for Indian steel exporters
  United States	Textiles from India	5	15	Affects India’s textile industry
  United States	Agricultural Goods (Rice, Spices)	7	20	Hurts Indian farmers exporting to US
  India	Almonds from US	20	40	US farmers lose access to Indian market
  India	Apples & Walnuts from US	25	50	Higher prices for US fruit exports
  India	Chemicals & Industrial Goods from US	15	30	Impacts US chemical manufacturers

• US-India Trade Talks Collapse Amid New Tariffs

The global economy is feeling the strain as US-India Trade Talks Collapse Amid New Tariffs, marking a major setback in bilateral relations. The talks, aimed at resolving long-standing trade disputes, collapsed after both nations failed to reach common ground on tariffs, agricultural subsidies, and market access.

The announcement that US-India Trade Talks Collapse Amid New Tariffs highlights the growing tension between two of the world’s largest economies. The United States recently imposed higher tariffs on Indian exports, including steel, textiles, and agricultural products. In retaliation, India raised duties on American goods such as almonds, apples, walnuts, and chemicals.

Experts warn that as US-India Trade Talks Collapse Amid New Tariffs, businesses on both sides will suffer. Exporters face reduced market access, while consumers may experience higher prices. The dispute also raises concerns within the World Trade Organization, as escalating tariffs risk creating ripple effects in global trade.

Looking ahead, the collapse underscores the urgent need for renewed diplomatic engagement. While US-India Trade Talks Collapse Amid New Tariffs today, industry leaders hope negotiations will eventually resume to protect trade partnerships and strengthen economic ties.