NEW DELHI (Reuters) -India is likely to be among the countries worst hit by U.S. President Donald Trump’s trade offensive, with tariffs on Indian imports set to surge to 50% if a deal is not struck in three weeks.
Below are various options for India to deal with the crisis.
NEGOTIATE FURTHER
India was expected to be among the first countries to sign a trade deal with Trump’s team, but talks fell through after five rounds of negotiations over disagreements on opening India’s vast farm and dairy sectors and stopping Russian oil purchases.
New Delhi has reacted strongly to the 50% tariff on U.S. imports from India, which could virtually stall trade. Still, Indian officials are hopeful that closed-door talks will address some differences. A U.S. trade team is expected to visit the Indian capital later this month.
But Prime Minister Narendra Modi said on Thursday, without referring to the tariffs, that he was ready to “pay a heavy price” for not compromising on the well-being of the country’s farmers, dairy sector and fishermen.
Indian officials, however, have said they are open to cutting tariffs for some U.S. farm and dairy goods like almond and cheese.
CUT RUSSIAN OIL IMPORTS
India, the world’s third-biggest oil importer and consumer, previously said it was confident of meeting its oil needs from alternative sources if imports from Russia become impractical due to sanctions or other reasons. It bought little Russian oil before the Ukraine war that began in 2022, but now gets more than a third of its oil imports from its old trade and defence partner.
Reuters reported late last month that Indian state refiners such as Indian Oil, Hindustan Petroleum, Bharat Petroleum and Mangalore Refinery Petrochemical had stopped buying Russian oil as discounts narrowed and pressure from Trump mounted. Officials have, however, warned of spikes in global prices without Russian oil in the market.
Besides Russia, other big suppliers to India are Iraq, Saudi Arabia and the United Arab Emirates under annual deals with the flexibility to request more supply every month.
In total, India buys from about 40 countries, including the United States.
BAND TOGETHER WITH FELLOW DEVELOPING COUNTRIES
Along with India, the other big target of Trump’s tariffs is Brazil. The two countries are founding members of the BRICS bloc that also includes China, Russia and South Africa.
Brazilian President Luiz Inácio Lula da Silva, who holds the presidency of BRICS, told Reuters that he would call Modi on Thursday and China’s Xi Jinping and other leaders afterwards to discuss the bloc’s response to the tariffs.
