India could bide time till US public opinion pushes Trump to review tariffs

With Trump's tariff hike targeting Indian exports, New Delhi may await US domestic shifts, engage BRICS leaders, and explore alternative markets before retaliating

India could challenge US President Donald Trump’s additional 25 per cent tariff in the US Court of Appeals for the Federal Circuit, or even put retaliatory tariffs. But on Thursday, top government ministers and officials rejected these suggestions. Instead, they said New Delhi should seek clarity on Trump’s domestic compulsions to impose these tariffs and bide time till year-end, when America starts preparing for the House of Representatives elections, which is when the White House would be amenable to heed electors’ ire over rising prices. India should, in the interregnum, look for other markets for its products, they felt.

 

New Delhi will also keep an eye on the developments around the proposed meeting between Trump and Russian President Vladimir Putin. On Thursday, National Security Adviser AK Doval was in Moscow to finalise dates for Putin’s visit to India, but officials rejected speculation it could happen in August.

 

 

While New Delhi’s engagement with White House is sparse, officials in India expect a phone conversation between Brazilian President Luiz Inacio Lula da Silva and Prime Minister Narendra Modi. Both Lula and Modi have been defiant towards Trump’s tariffs. 

 

Lula told a public meeting earlier this week that he would call Chinese President Xi Jinping and Modi to discuss a joint BRICS response to tariffs. The Indian PM is expected to visit China on August 31 to attend the Shanghai Cooperation Organisation (SCO), and also have a bilateral meeting with Xi. The Ministry of External Affairs is yet to officially confirm the visit, but government sources were certain the visit was on. India, Brazil, China and Russia are the founding members of BRICS, making these consultations in the backdrop of Trump’s tariffs crucial.

 

Sources conceded that New Delhi needed to work harder to try to understand Trump’s core elector base in Midwestern US. “Just as we cannot surrender the interests of our farmers and dairy industry, Trump is also looking for markets for the produce of the farmers in the Midwest, which are his support base, and it is important for him in the context of the mid-term elections since the Republican majority in the House of Representatives is thin,” a source said. 

 

Secretary, Economic Relations, Ministry of External Affairs, Dammu Ravi, argued there is no logic or reason behind US’ “unilateral” move to impose 50 per cent tariffs on India. “Perhaps, this is a phase we have to overcome. The negotiations are still going on. So, we are confident that solutions will be found in the course of time in looking at mutually beneficial partnerships,” he said on the sidelines of the LIDE Brazil India Forum on Thursday.

 

The Ministry of Commerce is leading the negotiation from the Indian side, and some solutions were in sight when Trump moved in with the tariff hike, he said. "We were very close to finding a solution, and I think that momentum has taken a temporary pause, but it will continue," he said.