New Delhi: The Narendra Modi government seems to be bowing down to U.S. President Donald Trump's tariff warnings. Trump has repeatedly stated that countries imposing high tariffs on American goods will face retaliatory tariffs. During Modi's recent visit to the U.S., Trump explicitly mentioned that India would face tariff-related challenges. In response, the Indian government is reportedly exploring options to reduce tariffs on various imports from the U.S. to avoid potential economic repercussions.

India is considering lowering tariffs on imported goods such as automobiles, agricultural products, chemicals, key pharmaceuticals, medical devices, electronics, and whiskey. Officials believe that reducing these tariffs could help India avoid U.S. trade penalties. The Indian government may even go beyond its planned tariff reductions to ensure smooth trade relations with the U.S. This move could result in significant tariff cuts on a wide range of imported goods and services.

Trump’s tariff warnings have shaken global markets, impacting stock, currency, and commodity sectors. To maintain a friendly trade relationship with the U.S., India is seeking to capitalize on the opportunities arising from Trump's trade war with China. The U.S. views India as a counterbalance to China and is keen on strengthening bilateral trade. Both nations aim to increase trade volume to $500 billion by 2030, up from $127 billion in 2023. Meanwhile, Trump is also considering imposing tariffs on Mexico and Canada and doubling the universal tariff on Chinese imports to 10% to curb illegal human trafficking and drug smuggling into the U.S.