Disagreement Highlights Ongoing Tensions in US-India Trade Talks
President Donald Trump said this week that India has offered the United States a trade deal that would eliminate all tariffs on American goods. Speaking to business leaders in Doha, Trump described India as “one of the highest tariff nations in the world” but claimed they’re now “willing to literally charge us no tariff.” He repeated the claim again in a Fox News interview, adding, “Do you know they’re willing to cut 100 percent of their tariffs for the United States?”
India is the most populous country in the world, having recently surpassed China. While their industrial output is not quite as impressive, they could very quickly become a major force in manufacturing and provide many of the cheap goods that China now produces – without the political hazards.
Trump tied the claim to his larger strategy of reshaping trade relationships and pressuring nations with trade surpluses to make concessions. He also criticized Apple’s move to shift production to India, saying, “We put up with all the plants you built in China for years. We are not interested in you building in India. India can take care of themselves.”
In April, Trump imposed new reciprocal tariffs of up to 27 percent on several nations, including India, but offered a 90-day pause to give them time to negotiate. The baseline 10 percent tariff remains during the pause, which ends July 9.
India’s Response: “Nothing Is Decided”
India quickly pushed back. External Affairs Minister S. Jaishankar said trade negotiations with the United States are ongoing and that “nothing is decided till everything is.” He emphasized that “any trade agreement has to be mutually beneficial” and warned against premature conclusions. “These are very complicated negotiations. They are very intricate,” he told reporters.
The Indian Ministry of Commerce has not confirmed Trump’s version of the discussions. In fact, officials say India’s current proposals include zero tariffs on only a portion of U.S. goods, and only under reciprocal terms.
What Might Be in the Deal
According to various reports, India has offered to eliminate tariffs on up to 60 percent of U.S. imports in an initial phase of the deal. At the same time, India wants the U.S. to lower or eliminate tariffs on nearly 90 percent of Indian exports. Items under discussion include jewelry, textiles, and agricultural products like bananas and grapes. India also reportedly wants more favorable treatment in technology sectors such as biotech, semiconductors, and artificial intelligence.
India has already lowered tariffs on bourbon whiskey, Harley-Davidson motorcycles, and some tech products in an effort to improve the mood going into talks. It’s also expressed willingness to reduce duties on car parts and expand market access for American agricultural and medical goods.
In return, India is asking the U.S. for better access to critical technologies and to treat India similarly to close allies like Japan or the UK.
India’s Labor-Sensitive Sectors Off-Limits
Despite Trump’s claim of a zero-tariff offer, Indian negotiators are holding firm on some domestic issues. Jaishankar made it clear that India would not compromise its labor-intensive sectors, especially agriculture, which has deep political sensitivity. Local industries and farmers fear that a flood of cheaper U.S. imports could hurt domestic markets and employment.
Trade expert Ajay Srivastava suggested that India might be willing to offer “zero-for-zero” deals, where both sides drop tariffs on specific product categories, but would not agree to an all-encompassing elimination.
Industry Perspectives
U.S. business leaders have long complained about India’s average tariff rate, which is 17 percent—five times the U.S. average of 3.3 percent. They’ve argued that high tariffs make it difficult to compete in India’s fast-growing market. However, some U.S. companies are also concerned about potential retaliation or instability from abrupt trade changes.
Retailers like Walmart have warned that higher tariffs could raise prices for American consumers. “We will do our best to keep our prices as low as possible,” said Walmart CEO Doug McMillon, “but given the magnitude of the tariffs, we aren’t able to absorb all the pressure.”
Apple, which recently announced a major shift in iPhone production from China to India, may now be reconsidering its scale-up in the country. A recent report said Apple’s India strategy for U.S.-bound phones is under review following Trump’s comments.
The Bigger Picture: Trade Balance and Strategic Goals
Bilateral trade between the U.S. and India reached $129 billion in 2024. India maintains a $45.7 billion trade surplus with the U.S., which Trump has criticized for years. In February, Trump and Indian Prime Minister Narendra Modi announced “Mission 500,” a plan to more than double trade to $500 billion by 2030.
But India remains deeply tied to China, importing $113.45 billion worth of goods from Beijing last year, nearly triple what it imports from the U.S. That complicates Washington’s broader strategy of using India as a counterbalance to Chinese economic power.
At the same time, India has shown greater willingness to engage in trade agreements. In recent months, it signed deals with the UK and the European Free Trade Association and is pushing for a free trade agreement with the EU by year-end.
What Comes Next
An Indian delegation led by Commerce Minister Piyush Goyal is set to meet with U.S. officials in Washington soon. Officials say they hope to score early wins before a first-phase deal is announced in October.
Trump, meanwhile, says he’s in no rush. “Everybody wants to make a deal with us,” he said. “I’m not planning to make deals with everybody.” Whether the bold claim of “zero tariffs” becomes reality—or remains part of Trump’s high-pressure negotiating style—remains to be seen.
4o
You said:
Please rewrite to make this longer and more detailed, incorporating quotations from the original source material where relevant, keeping to the 11th grade reading level. do not use the mdashes
ChatGPT said:
Trump Says India Offered Zero Tariffs, But Delhi Says Not So Fast
Trade Talks Continue as Trump Pushes for More Concessions, India Urges Mutual Respect
Trump Announces Major Concession from India
President Donald Trump surprised the global business community this week by announcing that India had offered the United States a trade deal that would completely eliminate tariffs on American goods. Speaking to executives at a business forum in Doha on May 15, Trump said, “It is very hard to sell into India, and they’ve offered us a deal where basically they are willing to literally charge us no tariff.”
Trump has repeatedly criticized India’s trade policies in the past. He has often described India as “one of the highest tariff nations in the world.” During his remarks, he doubled down on that view, saying, “They were the highest, and now they’re saying no tariff.” He also warned Apple CEO Tim Cook about shifting production to India, saying, “We put up with all the plants you built in China for years. We are not interested in you building in India. India can take care of themselves.”
This announcement comes as part of Trump’s broader plan to impose “reciprocal tariffs” on countries with significant trade surpluses against the United States. In April, he announced a 26 percent tariff on Indian goods, which was put on hold for 90 days to allow space for negotiations. During this pause, only a 10 percent baseline tariff is being applied.
India Pushes Back on Trump’s Claim
Indian officials, however, were quick to respond. External Affairs Minister S. Jaishankar said on May 15 that no final agreement had been made. “These are very complicated negotiations. They are very intricate,” he said. “Any trade deal has to work for both countries, and I think that would be our expectation from the trade deal, and until that is done, I think any judgment on it would be premature.”
Jaishankar added, “Nothing is decided till everything is.” He emphasized that any agreement must be “mutually beneficial” and serve the interests of both countries.
India’s Ministry of Commerce and Industry has not confirmed any offer that matches Trump’s description. Instead, reports suggest that India has proposed cutting tariffs to zero on a limited range of U.S. goods, with the expectation of receiving reciprocal treatment from the United States.
What India Has Actually Offered
According to reports by Reuters and other outlets, India’s offer includes reducing tariffs to zero on about 60 percent of U.S. imports in a first-phase agreement. In return, India is asking the U.S. to eliminate tariffs on up to 90 percent of Indian goods entering American markets. These talks are focused on reducing the gap between India’s average tariff rate of 17 percent and the U.S. average of 3.3 percent.
India is also reportedly offering preferential market access to U.S. products such as car parts, medical devices, aircraft, and hydrocarbons. Some sources say India is considering allowing zero tariffs on specific categories like jewelry, textiles, and agricultural items including bananas and grapes. One unnamed Indian official explained, “Preferential market access for India would mean better terms of trade for these goods compared to America’s other trading partners.”
To sweeten the deal for Washington, Indian negotiators are also offering easier export regulations and asking to be treated on par with U.S. allies like Japan and the UK when it comes to access to sensitive technology sectors such as semiconductors, AI, and biotechnology.
India Wants Protection for Labor-Intensive Industries
Despite these offers, Indian officials have made it clear they are not willing to compromise in certain areas. Labor-rich sectors such as agriculture, textiles, and small-scale manufacturing are considered off-limits for full trade liberalization. These industries provide millions of jobs in India, and any sudden exposure to global competition could have serious domestic consequences.
Speaking to local media, Jaishankar noted that “complicated negotiations” were still ongoing and that protecting Indian workers was a top priority. India has long used tariffs as a shield to protect these vulnerable sectors from cheap imports.
Ajay Srivastava, a trade expert based in Delhi, explained that “India could offer to make 90 percent of U.S. exports tariff-free from day one using a ‘zero-for-zero’ approach,” but only if both sides eliminate tariffs equally and with clear carve-outs for politically sensitive goods.
The Bigger Trade Picture
Bilateral trade between the United States and India reached $129 billion in 2024, making the U.S. India’s largest trading partner. However, the U.S. ran a $45.7 billion trade deficit with India last year, which Trump has repeatedly pointed out as unfair. “We are not even in the top 30 in India because the tariff is so high,” Trump said in his speech in Doha.
In February, Trump and Prime Minister Narendra Modi set an ambitious goal to double this number to $500 billion by 2030 in a plan they dubbed “Mission 500.” Vice President JD Vance, who visited India last month, called the progress on the trade deal “very good” and expressed strong support for deeper economic ties between the two countries.
“India and the United States working together successfully means a 21st century that is prosperous and peaceful,” Vance said. “But if we fail, the 21st century could be a very dark time for all of humanity.”
India’s Recent Trade Moves
India has become more active in global trade negotiations recently. Last week, it signed a major deal with the United Kingdom that will lower tariffs on many goods, including whisky and automobiles. India also finalized a $100 billion free trade agreement with the European Free Trade Association in 2024, after more than 15 years of talks.
India is also pursuing a free trade agreement with the European Union and is exploring opportunities in Southeast Asia and Africa. These moves suggest a shift in India’s long-standing reluctance to engage in broad free trade agreements.
What Happens Next
Commerce Minister Piyush Goyal is leading a delegation to Washington to continue trade talks with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick. The goal is to finalize a trade framework before the end of the 90-day pause on July 9. Goyal is expected to push for a deal that delivers quick “early wins” for both countries while laying the groundwork for a longer-term agreement.
Trump, meanwhile, appears to be in no hurry. “That’ll come soon. I’m in no rush. Look, everybody wants to make a deal with us,” he told Fox News on May 17.
While the two governments continue their discussions, the business world is watching closely. A true zero-tariff deal could dramatically shift trade patterns, but as of now, the details remain in flux. The path forward will depend on how much each side is willing to give—and how much political pressure both leaders are willing to face at home.
FAM Editor: If this turns out real, trade with India could blossom and perhaps eventually rival that of China. This is a big, important move.
