New Delhi: Trade relations between India and the US are facing increasing strain, with the Trump administration signalling potential reciprocal tariffs and raising concerns over India’s intellectual property (IP) protection, even as the founder of a think tank urges India to withdraw from ongoing trade negotiations.
The US government under President Donald Trump is intensifying its focus on what it perceives as unfair trade practices and IP violations by several countries, including India.
India is among the countries that Washington has placed on its “priority watch list”, citing “particular problems … with respect to IP protection, enforcement or market access for persons relying on IP”.
US concerns about inadequate IP protection, the Hindustan Times reported, have to do particularly with the pharmaceutical, medical device, digital service and ICT sectors. The US Trade Representative (USTR) is also considering an “out-of-cycle review”, a mechanism to encourage progress on IP issues, which could lead to remedial actions.
HT also noted that the USTR’s 2024 ‘Special 301 Report’ released last year highlighted concerns about IP enforcement in India, including online piracy, trademark backlogs and insufficient protection for trade secrets.
Meanwhile, Trump has threatened to impose reciprocal tariffs on countries including India starting in April, citing high tariffs on American goods.
US commerce secretary Howard Lutnick has emphasised the need for India to open its agricultural market and advocated for a “macro, large and grand trade agreement”, rather than a product-by-product approach.
Adding to the pressure, the founder of Delhi-based think tank Global Trade Research Initiative (GTRI) has urged India to withdraw from all trade negotiations with the US.
Accusing Trump of “insulting” behaviour and using “wrong data”, Ajay Srivastava stated that “no balanced outcome is possible” under these circumstances; he also referenced previous US claims about tariffs on Harley Davidson motorcycles that were inaccurate, reported PTI.
GTRI suggests India consider a “zero-for-zero” approach, eliminating tariffs on a majority of industrial products only if the US reciprocates, or focus on strengthening domestic industries to reduce dependence on the US market.
They warn that if a trade agreement is negotiated, the US could “push India to open government procurement to American firms, reduce agricultural subsidies, weaken patent protections by allowing evergreening and remove restrictions on data flows”.
These, it said, are “demands India has resisted for decades and is still not prepared to accept”.
The current weighted average tariff on US goods entering India is 7.7%, while Indian exports to the US face a 2.8% tariff, creating a 4.9 percentage point difference, according to the Telegraph.
Sectors potentially impacted by reciprocal tariffs include agriculture, processed foods, automobiles, diamonds, gold, chemicals and pharmaceuticals.
During Prime Minister Narendra Modi’s visit to Washington last month, both sides agreed to finalise a bilateral trade deal addressing “concerns”, the first tranche of which was to be negotiated before fall this year.
Modi also said that India and the US had set a target to double bilateral trade to $500 billion by 2030.
