US President Donald Trump said America maintains a good relationship with India but described the trade relationship as “one-sided” for many years due to India’s high tariffs on American goods.
“No, we get along with India very well,” Trump said at the White House on Tuesday (September 2) in response to a question about whether he is considering removing some tariffs imposed on India.
Trump highlighted that India was charging “tremendous tariffs, about the highest in the world,” which limited US business with India. He said, “But they were doing business with us because we weren’t charging them, foolishly, we weren’t charging them. They’d send it in, pour it into our country. Therefore it wouldn’t be made here, which is a negative, but we would not send in anything because they were charging us 100% tariffs.”
Harley-Davidson example
Citing Harley-Davidson, Trump said the US company faced a 200% tariff on motorcycles imported into India, which prompted the company to set up a plant in India. “So what happens? Harley Davidson went to India and built a motorcycle plant, and now they don’t have to pay tariffs, same thing as us,” Trump explained.
Trump’s message on trade reform
Trump emphasised that the US has taken steps to correct the imbalance since he assumed office, implying that changes in tariffs and trade policies have created a fairer environment for American businesses.
Trump doubles duties on Indian goods
The United States has raised tariffs on Indian imports to as much as 50%, a move that has sparked strong criticism from New Delhi. The steep duties, announced by Trump, include a 25% reciprocal tariff and an additional 25% levy on India’s purchases of Russian oil, making them among the highest Washington has imposed on any nation.
Impact on Indian exporters
The new tariffs, effective from August 27, are expected to hit India’s textiles, gems and jewellery, seafood, chemicals, steel, aluminium, and copper sectors the hardest. According to SBI Research, around $45 billion worth of exports will be impacted.
The US is India’s largest export destination for textiles and accounts for nearly a third of India’s $28.5 billion gems and jewellery shipments.
Services and pharmaceuticals remain insulated from the new duties due to exemptions, offering some relief to IT majors such as TCS, Infosys, Wipro, HCL, and Tech Mahindra.
India’s response: “Will not bow down”
India has denounced the tariffs as unjustified and unreasonable. Prime Minister Narendra Modi has said he will not compromise on the interests of farmers, livestock rearers, and small-scale industries, even as pressure mounts.
Commerce and Industry Minister Piyush Goyal said: “If somebody wants to have a good free trade agreement, we will always be ready. But if somebody discriminates, we will never bow down, nor will we ever be weak.”
India is hopeful of concluding its proposed bilateral trade agreement (BTA) with the United States by the fall, potentially by November, despite recent geopolitical challenges affecting negotiations. Goyal expressed optimism on Tuesday, emphasising that trade discussions between the two nations are expected to resume full pace soon
Bilateral trade pact in limbo
India and the US have been negotiating a bilateral trade agreement (BTA) since March, with five rounds of talks completed. The sixth round, scheduled for August 25, was deferred after the tariff hike. Washington is pressing for greater access to India’s agriculture and dairy markets, while New Delhi seeks tariff reductions.
Global context and legal challenges
The tariffs are part of Trump’s broader use of duties as a policy weapon, disrupting global trade flows. The additional levies on India were introduced in line with Washington’s efforts to pressure Moscow over its war in Ukraine by discouraging purchases of Russian crude.
Meanwhile, a divided US appeals court recently ruled that most of Trump’s tariffs are illegal, though they remain in effect until October 14 to allow for an appeal to the Supreme Court.
