New Delhi: A day after US President Donald Trump claimed that India had agreed to cut its tariffs “way down,” the Indian government sought to counter the Congress party’s criticism by noting that average applied tariff cuts have also taken place with other developed countries with which it has bilateral free trade agreements.
Addressing the media in the Oval Office on Friday, March 7, Trump once again raised the issue of India imposing “massive” tariffs on American goods. He added, “They’ve agreed – by the way, they want to cut their tariffs way down now because somebody’s finally exposing them for what they’ve done.”
The remarks triggered an immediate political response in New Delhi, with the Congress party demanding to know whether the Modi government had “surrendered” the interests of Indian farmers and small businesses under US pressure.
“What has the Modi government agreed to? Are the interests of Indian farmers and manufacturing being compromised? The PM must take Parliament into confidence when it resumes on March 10,” Congress general secretary Jairam Ramesh said in a post on X.
He pointed out that commerce minister Piyush Goyal was in Washington DC for trade talks with the US, following which Trump claimed that India had agreed to lower tariffs.
“Why have you surrendered India’s national and strategic interests? What was your minister Piyush Goyal doing in the US when President Trump announced that India has agreed to reduce tariffs? Isn’t suffering reciprocal tariffs better than lowering our own after reciprocal tariffs have already been imposed?” Congress media and publicity department head Pawan Khera asked at a press conference on Saturday, March 8.
He also questioned whether the government had succumbed to pressure from PM Modi’s “close friend, Donald Trump”. “Has Union Minister Piyush Goyal, who is in the United States to apparently negotiate a trade deal, buckled under pressure and signed on the dotted line dictated by Howdy Modi’s close compatriot, Namaste Trump?” he asked.
Khera demanded an explanation for the government’s silence. “Why is this deal, if any, shrouded in secrecy?”
The Congress leader noted that Mexico and Canada had pushed back against Trump, spoken in a “firm voice,” and secured at least a month’s pause to negotiate on US reciprocal tariffs.
“Has the prime minister picked up the phone and spoken to his friend? Has the Modi government surrendered the interests of farmers and MSMEs (micro, small, and medium enterprises) to benefit select crony friends? Why this pressure? Why this fear? Why this silence? Why this surrender?” Khera asked.
Trump has repeatedly singled out India as one of the countries imposing “massive” tariffs. His remarks on Friday were the latest in a series of criticisms, despite Modi’s visit to Washington last month, where both sides had agreed to finalise a bilateral trade deal addressing “concerns.” The negotiations for a first tranche of a multi-sector Bilateral Trade Agreement is to be completed by the fall of this year.
On Wednesday, Trump had also threatened to impose reciprocal tariffs on India – including non-monetary measures – starting April 2.
There had been no official response from the Indian government to Trump’s repeated remarks, except for External Affairs Ministry spokesperson Randhir Jaiswal reiterating on Friday that India and the US were working to advance discussions on a mutually beneficial trade deal.
MEA statement
Hours after the Congress party’s attack, official sources within the Indian government issued a detailed but off-the-record statement on Saturday evening.
The statement, attributed to government sources, said that discussions had “just begun” and that it was “premature to talk about details.” It added, “There is also a context for each dimension that reflects the interests of both sides.”
The sources highlighted that “India has significantly reduced its average applied tariffs for key developed countries like Australia, the UAE, Switzerland, and Norway under recently concluded mutually beneficial bilateral trade agreements.”
“Similar negotiations are currently underway with the European Union and the United Kingdom, among other partners. The ongoing discussions with the United States should be seen in this context,” the statement said.
It was also noted that “specifics on various issues have been mentioned as part of the negotiation” with the US.
“It is natural for both countries to have their interests and sensitivities. These are legitimate matters for discussion,” sources stated. They also “recalled” that discussions for a limited trade deal had taken place during Trump’s first administration but “for various reasons, it did not produce an outcome”.
Misri
At today’s special briefing by the MEA on the prime minister’s state visit to Mauritius foreign secretary Vikram Misri fielded questions on tariffs but did not say much.
When asked as to whether India will be discussing the tariffs situation with Mauritius, Misri said that there is “perhaps likely to be a general discussion on how different countries can react to this new narrative related to trade and tariffs that we see currently hitting the headlines.”
“Obviously, there is no one-size-fits-all solution that is possible on this. Different measures are being taken for different countries and different countries are going to be impacted differently depending on the makeup of their economies, their current sort of situation in terms of trade,” he said.
In follow-up questions, Misri was asked if it should it be understood that he is saying that tariffs should only be based on bilateral agreements and to clarify Trump’s indication that India has agreed to pull down tariffs. Misri said he does not wish to get into it.
“Insofar as the questions related to trade and tariff are concerned, I know there is a lot of interest in the Statements coming out of the United States. I will not get into that at this point in time because these are ongoing discussions. So, it would not be right to get into it. But I would only point you towards the fact that we have in recent times entered into bilateral trade agreements which are based on tariff liberalization with several partners. There are ongoing discussions with several other partners on these issues now and I think the ongoing discussions should be seen in that context as well.”
Lutnick
Before Trump’s latest remark on Friday, the US commerce secretary, Howard Lutnick, Goyal’s counterpart had also appeared via video conference at the India Today conclave, arguing that India needed to pursue a broad-based rather than sector-specific reduction in tariffs on American imports.
“It’s time to do something big, something grand, something that connects India and the United States together but does it on a broad scale, not product by product, but rather the whole thing,” said Lutnick.
When told that rolling back tariffs on agricultural products would be a political setback for the Modi government, Lutnick responded that India’s agricultural market “has to open up, it can’t just stay closed.”
“Now, how you do that and the scale by which you do that – maybe you do quotas, maybe you do limits – you can be smarter when you have your most important trading partner on the other side of the table,” he said.
The US commerce secretary, “You can’t just say, as you said, ‘Oh, it’s off the table’; that’s just not an attractive way of doing business.”
Later in the conclave, the discussion turned to India’s concerns about the reliability of the United States as an arms supplier. Concerns were raised about past instances of withheld military technology, including the GE F404 engine for the Indian Air Force.
Lutnick was asked about the trustworthiness of the U.S. as an arms supplier, given historical inconsistencies and compared to other nations like France, Britain, and Russia.
Lutnick responded dismissively, saying, “Come on! America is… the greatest military and industrial complex supplier in the world by far. Suggesting France or the UK, let alone Russia, as alternatives… No. America’s military gear and technology are the greatest. India needs to engage with the United States, as your Prime Minister did successfully. The key is to form the best relationship between India and the United States.”
