Perspective – Written by Zsolt Trembeczki
A U.S.–India trade deal was expected to be among the first ones announced following U.S. President Donald Trump’s “Liberation Day” barrage of tariffs. Instead, by late July, negotiations collapsed. In early August, the Trump administration hit India with an increased 50 percent tariff rate—ostensibly in retaliation for India’s import of Russian energy but likely because of India’s hardening stance on agricultural markets. The increased tariffs have entered into force, and New Delhi’s position remained defiant. There is still chance for an eventual agreement later this year, and common geopolitical interests—especially balancing against China’s rise—will not go away; still, the episode will have negative impact on the two countries’ strategic trust and goodwill. The episode underlines that India is willing to go to greater lengths than before with trade concessions, but its red lines around agriculture and other sensitive areas are firm. In their own trade talks with India, EU negotiators should take advantage of the window of opportunity to reach a deal before Washington and be careful not to push it to a breaking point.
The full analysis is available here.