India is remarkably quiet with less than one week left before the United States makes a decision on whether or not to introduce new tariffs.
A trade agreement has not been reached despite months of negotiations, and New Delhi officials haven’t provided any public updates.
Silence is not accidental. Holding back could be India’s strategic choice to avoid pressure and continue negotiations behind closed doors.
As the deadline of August 1 approaches, the stakes appear to be high. However, the government seems to have opted for a cautious approach and is weighing all options.
Why India-US trade deal taking so long?
Washington has pressed New Delhi for lower tariffs, and to open its market more, especially in the case of American agricultural products, such as dairy, genetically modified plants, industrial goods and electric cars.
This push is in line with President Trump’s demand for “fairer” trade conditions, while focusing on reciprocity.
India treads carefully. The Indian government is unlikely to change its mind about opening up the dairy and agricultural sectors. These are highly sensitive political issues and are vital to millions of small-scale farmers’ livelihoods.
One senior official in the trade sector said it bluntly: “That is a redline.” It’s not just economics that’s causing concern, but also rural politics during an election season.
New Delhi also wants something back: the US to remove tariffs from Indian exports such as steel, aluminium, and certain auto parts.
The duties that were first introduced during previous trade tensions remain an issue. Indian negotiators view them as unfair, and also out of line with the larger push to achieve a more equal relationship.
What is India doing to keep cool?
India is aware that Washington’s top priority remains to reduce reliance on Chinese manufacturers, particularly in light of the recent US-China Trade Agreement, which has lowered tariffs, and may once again give China a competitive edge when it comes to global exports.
This shift in the market has made it more urgent to find alternative partners. India’s vast market, democratic system and growing industrial footprint make it an attractive alternative.
US supply chain moves towards India have real potential, both to diversify the manufacturing industry and to enhance high-tech cooperation with India in the Indo-Pacific.
Goal: build resilience to counter China’s power without escalated confrontation.
India has also made it clear that they want to take part in this shift. Apple and other global giants have begun to expand production in India.
There’s still an air of unease. India’s short-term advantages in trade could be eroded by the US-China deal on tariffs.
India is still a key player in Washington’s efforts to revamp global trade routes. This includes advanced manufacturing, emerging technology, and new technologies.
What’s next?
In August, a US delegation is expected to arrive in New Delhi and resume trade talks.
Indian officials have downplayed the importance of an all-encompassing deal. They prefer smaller sectoral agreements over a broad framework.
US negotiators know that a strong stance towards India can create tensions at a moment when Washington is seeking to strengthen strategic relations in the Indo-Pacific.
This awareness has moderated some of the rhetoric.
While officials from both sides expressed a willingness for continued dialogue, there hasn’t been much progress on the key issues.
If progress is made, it will likely be very slow.
The strategy of silence is revealed in this post: India keeps its cool while US-India trade deal hangs on the line. This post may change as new information becomes available
