As US President Donald Trump moves ahead with a fresh 25% tariff on Indian goods, trade experts and business leaders are urging restraint, warning that escalation could hurt exporters and small businesses on both sides.The latest tariff announcement, a slight moderation from the 26% rate floated in April, comes with Trump labeling India’s trade policies as “obnoxious” and “strenuous,” accusing the country of imposing high non-monetary barriers and continuing purchases of military hardware and oil from Russia.In a social media post, Trump also pointed to America’s “massive” trade deficit with India, while stressing that Washington had been seeking a zero-tariff agreement, similar to those struck with countries like Japan and Vietnam.
Despite the friction, US-India bilateral trade reached $131.8 billion in FY25, with India recording a trade surplus of over $41 billion. Exports to the US rose by 11.6% while imports climbed 7.4%, reinforcing the depth of the economic relationship.Amid the tension, Atul Keshap, President of the US-India Business Council (USIBC), has called for calm and constructive engagement. “There is obviously some impatience,” Keshap acknowledged. “But both sides need to be dispassionate, step back, and figure out how to work a deal.”Read Here | Trump 25% Tariff On India: Four textile stocks and their exposure to the USKeshap highlighted that the American market is crucial to thousands of Indian small and medium enterprises (SMEs) across cities like Surat, Vadodara, and Bengaluru. A prolonged tariff war, he warned, would severely impact these exporters and stall momentum in bilateral trade.“We are better off together,” Keshap said, noting that India—like the EU, Japan, Vietnam, and others—stands to gain from deeper alignment with the US through greater market access, technology sharing, and foreign investment.While Keshap struck a hopeful tone, William Reinsch, Senior Adviser at the Center for Strategic and International Studies (CSIS), offered a more critical view of Trump’s tactics.“It’s a classic Trump tactic—if he’s not getting what he wants, he pushes harder. It’s a bullying strategy,” Reinsch said, comparing Trump’s pressure campaign on India to earlier confrontations with the European Union and China.Reinsch suggested the move is designed to force New Delhi to the negotiating table. “If the talks don’t move fast enough or in his direction, he attacks. This is negotiating, Trump-style,” he said.Leah Fahy, Chief Economist at Capital Economics, noted that the tariff announcement could dent India’s image as a rising manufacturing hub—especially since it had hoped to benefit from higher US tariffs on China.She emphasised that India’s advantages—such as low labour costs and a large workforce—still position it well to attract investors seeking to diversify supply chains away from China.Watch accompanying video for moreFollow our live blog for the latest updates as President Trump announces a 25% tariff on India
