The Future of India-US Trade: India’s Strategic Choices Against Trump’s Trade Pressures

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Published March 30, 2025

Executive Summary

The global economic landscape is in flux, with protectionism and a transactional approach to trade becoming increasingly prevalent. This presents a significant challenge for India, which has historically deployed tariffs and non-tariff barriers as key instruments of its trade policy. The Donald Trump administration's aggressive tariff measures further exacerbate these challenges, necessitating India's strategic and carefully calibrated response. 

India must undertake significant reforms to address challenges and unlock its full trade potential. This paper analyses India's policy options, recommending a gradual, phased liberalisation approach that incorporates targeted tariff reductions and a proactive pursuit of a Free Trade Agreement (FTA) with the US. This evolving landscape sets the stage for bold, strategic measures to promote India’s trade and further accelerate its journey toward economic growth. This paper proposes that India should lower tariffs on select items by the April 2, 2025, deadline for Trump's reciprocal tariff threats while pursuing a zero-for-zero-based Free Trade Agreement (FTA) in line with the September deadline.

Authors

Shikha Tomar

Shikha is a founder of a mental health start up called Ease and a PGP student at the Takshashila Institution.

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