Modi: Will Not Sacrifice Domestic Interests

On the 7th, Modi stated in New Delhi that while rejecting US demands would come at a cost, India would not compromise the interests of its domestic agriculture, dairy, and fisheries sectors, as the welfare of Indian farmers is "paramount." Previously, India and the US failed to reach consensus in trade negotiations regarding agricultural products and imports of Russian oil.

This is widely seen as Modi’s first direct response following the US’s latest tariff hikes on India.

After Trump’s executive order on the 6th, the Indian government promptly issued a statement condemning the US tariffs as "unfair, unjust, and unreasonable," vowing to "take all necessary steps" to protect national interests. India clarified that its Russian oil imports are market-driven and aimed at ensuring energy security, expressing "deep regret" over the US’s additional tariffs.

The cumulative US tariff rate on Indian exports has now reached 50%. Indian analysts warn this will severely disrupt bilateral trade.

Former Indian trade official Ajay Srivastava noted the new tariffs would make India one of the hardest-hit US trade partners, potentially slashing exports to the US by "40–50%."

Ajay Sahai, Director General of the Federation of Indian Export Organisations, called the move a "major setback," with many orders already on hold, adding that "this additional blow could cost exporters long-term clients."

Madhavi Arora, economist at Emkay Global Financial Services, stated, "At such draconian tariff rates, trade between the two nations will effectively 'die.'"

Shakshi Gupta of HDFC Bank warned plunging US-bound exports could drag India’s GDP growth below 6% this year, missing the central bank’s 6.5% forecast.

Trump’s threat to tariff pharmaceuticals—a top-three Indian export to the US—could deal another heavy blow. India’s pharma exports exceeded $10.5 billion in FY2024–25, per Commerce Ministry data.