India has reportedly extended a significant trade offer worth between $150 billion and $200 billion to the United States, aiming to avert proposed new tariffs by President Donald Trump’s administration and to build a deeper strategic economic relationship. Senior government sources confirmed that while the modalities are still under discussion, the final call now rests with President Trump, who has threatened broad tariff measures against major trading partners in his second term push for “America First” policies.
Backdrop: Tariff Threats And Geopolitical Dynamics
President Trump, who has revived his earlier rhetoric of imposing 10-25% tariffs on steel, autos, and electronics imports, had earlier warned Asian trading partners including India, Japan, and South Korea of imminent tariff hikes if trade deficits were not addressed promptly. This comes at a time when India is seeking to diversify supply chains, attract US investments in critical sectors, and maintain stable market access for its pharmaceuticals, IT services, textiles, and auto parts industries.
| Key Proposed US Tariffs Impacting India | Tariff Rate | Sector Impacted |
|---|---|---|
| Steel | 25% | JSW, Tata Steel exports |
| Auto Parts | 10-15% | Motherson Sumi, Bharat Forge |
| Pharmaceuticals | Potential non-tariff barriers | Sun Pharma, Dr Reddy’s |
Details Of India’s Trade Offer
The $150–200 billion trade proposal includes:
- Energy Imports Expansion
- Additional LNG and crude oil purchase agreements with US firms such as ExxonMobil and Chevron to reduce India’s dependence on Russia and West Asia.
- Defence Procurements
- Fast-tracking potential multi-billion-dollar acquisitions including MQ-9B drones, naval helicopters, and GE jet engines co-production.
- Agricultural Market Access
- Removing certain phytosanitary restrictions to allow imports of American almonds, apples, and pulses, a long-standing demand of US agribusiness lobbies.
- Digital Trade And Services Commitment
- Proposed safeguards for US tech companies operating in India while seeking clarity on data localisation rules.
- Semiconductor Collaboration
- Incentives for American semiconductor majors to set up assembly and packaging units in India under the government’s ₹76,000 crore PLI scheme.
Why The Offer Matters For India
Officials argue the offer will:
- Stabilise market confidence amid global trade war threats.
- Strengthen geopolitical ties with the US at a time when China is consolidating influence in the Global South.
- Support rupee stability by boosting dollar inflows through energy deals.
- Create jobs via localisation of defence manufacturing and semiconductors.
A senior Commerce Ministry official stated:
“We have put a pragmatic offer on the table. The ball is now in Washington’s court. A punitive tariff regime helps no one when the world is already facing growth concerns.”
US Response: Cautious Optimism
While there is no official confirmation from the White House yet, US Trade Representative Katherine Tai has acknowledged “constructive discussions” with India’s Commerce Minister Piyush Goyal. However, President Trump’s final approval will hinge on:
- Domestic electoral considerations as he campaigns on restoring manufacturing jobs.
- Trade deficit numbers with India, currently at $27 billion in India’s favour.
- Pressure from US steel, auto, and agriculture lobbies demanding protection or market access.
Past Trade Disputes: A Timeline
| Year | Issue | Resolution |
|---|---|---|
| 2018 | US imposed steel and aluminium tariffs | India retaliated with tariffs on US almonds, walnuts |
| 2019 | India lost GSP preferential status | Negotiations for partial restoration stalled |
| 2020 | Phase-1 trade talks initiated | Paused due to COVID-19 crisis |
| 2022 | Tariff truce under Biden administration | Limited progress beyond energy deals |
| 2025 | Trump proposes 10-25% new tariffs | India offers $150–200 billion trade package |
Indian Industry Reactions
| Sector | Reaction |
|---|---|
| Steel & Metals | Warned of export losses if 25% tariffs imposed without exemption. |
| Pharmaceuticals | Concerned about potential FDA barriers despite India’s generic dominance. |
| IT Services | Optimistic about services trade being excluded from tariff regime. |
| Agriculture | Fearful of market flooding with US farm products affecting local prices. |
Confederation of Indian Industry (CII) President Sanjiv Puri said:
“India’s proactive trade offer shows our commitment to a rules-based global order. Strategic energy and defence purchases also align with our national security interests.”
Geopolitical Context: Countering China
India’s move is seen as an attempt to strengthen its partnership with the US amid concerns over China’s aggressive economic diplomacy in Asia, Africa, and Latin America. Officials emphasise that energy deals, defence ties, and tech partnerships with the US will enable India to reduce dependence on Russian military hardware while competing with China’s Belt and Road Initiative.
Next Steps
Indian negotiators are awaiting:
- Formal communication from President Trump’s office outlining his stance on new tariffs.
- Possible visit by US Commerce Secretary to New Delhi later this month to finalise energy and agriculture agreements.
- Discussion during upcoming Quad Ministerial Meet where economic security will feature prominently.
Conclusion: Awaiting Trump’s Decision
The coming weeks will determine whether India’s $150–200 billion trade package can avert a full-fledged tariff war and usher in a new phase of Indo-US strategic trade partnership. President Trump’s final nod will be crucial not only for bilateral ties but also for global trade stability amid recessionary fears.
Disclaimer: This news article is based on government discussions, industry inputs, and trade negotiation updates as of publication date. Readers are advised to follow official Ministry of Commerce and US Trade Representative announcements for final details of trade outcomes.
