US-India trade row: MEA official calls Donald Trump's tariff hike a ‘unilateral decision'; says both sides were ‘very close to a solution'

Time of India

9 hours ago

US President Donald Trump (AI image)
A senior Indian diplomat on Thursday criticised the Donald Trump administration's imposition of 50 per cent tariffs on Indian exports to the US, calling the move 'unilateral' and lacking any 'logic or reason', even as he confirmed that bilateral trade negotiations between the two sides would continue.
'This is a unilateral decision. I don't think there is any logic or reason in the way it is done,' said Dammu Ravi, secretary (economic relations), ministry of external affairs, speaking to reporters on the sidelines of the LIDE Brazil India Forum in Rio de Janeiro, as quoted by news agency PTI.
The remarks came hours after US President Donald Trump signed an executive order doubling import tariffs on Indian goods to 50 per cent, citing New Delhi's continued imports of discounted Russian oil as the reason.
The move is expected to severely affect key sectors like textiles, marine products, leather, and chemicals.
In its first official reaction, India called the move "unfair, unjustified and unreasonable", according to government sources.
Despite the escalation, Ravi indicated that India would continue to engage diplomatically. "Perhaps, this is a phase we have to overcome. The negotiations are still going on. So, we are confident that solutions will be found in the course of time in looking at mutually beneficial partnerships," he said.
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According to Ravi, India's ministry of commerce is leading the discussions with the US, and talks had made significant headway before the tariff hike was announced.
'We were very close to finding a solution, and I think that momentum has taken a temporary pause, but it will continue,' he added.
A US delegation is expected in India later this month for the sixth round of talks on a proposed bilateral trade agreement (BTA).
The two countries are hoping to conclude the first phase of the BTA by October–November.
Downplaying the long-term impact of the tariffs, Ravi said Indian industry was resilient and would not be derailed by the new duties.
'The high tariff will not have any detrimental impact on the Indian industry. It will not pull back or derail India Inc,' he asserted.
Ravi noted that countries often look for alternative markets when faced with tariff 'walls', and said India would now turn its attention to geographies such as the Middle East, Latin America, Africa and South Asia.
'If the US becomes difficult to export to, you will automatically look at other opportunities,' he said.
Describing Trump's move as a "temporary aberration", Ravi expressed optimism that the situation would stabilise with time and dialogue.
'This is, in my view, a temporary aberration, a temporary problem that the country will face. In the course of time, we are confident that the world will find solutions to it. Like-minded countries will look for cooperation and economic engagement that will be mutually beneficial for all sides,' he said.
Ravi also addressed concerns about the growing global momentum toward de-dollarisation. Though he denied any deliberate move to bypass the US dollar, he said many countries were now seeking alternatives for bilateral trade due to a shortage of hard currency post-Covid.
'Work on this aspect is on bilaterally and at the Brics level,' he noted.
Trump's executive order, 'Addressing Threats to the US by the Government of the Russian Federation', imposes an additional 25 per cent tariff on Indian goods over and above the existing 25 per cent levy.
The first layer of duties takes effect from August 7, with the additional 25 per cent kicking in from August 27.
India currently imports around 88 per cent of its crude oil needs, and Russian oil, available at a discount after the Ukraine war, has become the country's largest source. As of July, 1.6 million barrels per day of India's 5 million bpd crude imports came from Russia.
The new US duty would make India the highest-taxed exporter to the US (at 50 per cent), alongside Brazil.
In comparison, tariffs on similar goods from competitors like Bangladesh (35 per cent), Vietnam (20 per cent), and China (30 per cent) remain significantly lower.
Trade experts believe the tariff hike is a pressure tactic by the US ahead of the ongoing BTA negotiations. Washington is seeking duty concessions on electric vehicles, dairy, wines, petrochemical products, apples, tree nuts, genetically-modified crops, and more.
In 2024–25, bilateral trade between India and the US stood at $131.8 billion, with Indian exports accounting for $86.5 billion.
Despite the tensions, Ravi emphasised the strategic nature of the India-US partnership. 'We have a complementary relationship. Businesses and leaders on both sides are looking at trade opportunities,' he said.
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