From ₹20,000 cr plan to BRICS talks: India's possible options and risks in Trump's tariff stand-off
India faces potential tariff hikes of 50% on its exports to the US if a trade agreement isn't reached soon. India is exploring options like negotiating with the US, reducing reliance on Russian oil, and strengthening ties with BRICS nations. Failure to reach an agreement could significantly impact India's exports and tech sector.
Agencies From ₹20,000 cr plan to BRICS talks: India's possible options and risks in Trump's tariff stand-off India is likely to be heavily affected by US President Donald Trump's latest tariff push, with import duties on Indian goods expected to surge to 50% unless a trade agreement is reached within three weeks.
Here's how India is weighing its options.
The Indian government is gearing up to launch a ₹20,000 crore export promotion mission to shield exporters from global trade uncertainties. The initiative, expected to be finalised by August and rolled out by September, is being jointly developed by the ministries of commerce and industry, MSME, and finance.According to ET Rise sources, the mission will focus on five key areas: trade finance, non-trade finance (including regulations, standards, and market access), improving global recognition of Brand India, creating e-commerce hubs and warehousing, and streamlining trade facilitation.Ajay Sahai, Director General and CEO of the Federation of Indian Export Organisations (FIEO), said the mission, first announced in this year's Union Budget, aims to boost access to export credit. 'From that perspective, there may be some softening of collateral on one hand; there may also be an element of the Interest Equalisation Scheme,' he explained.
India was once seen as a frontrunner for a trade deal with Trump's administration, but negotiations broke down after five rounds due to differences over access to India's farm and dairy sectors and its continued purchase of Russian oil.India has strongly opposed the proposed 50% tariff hike. Still, as per Reuters officials remain hopeful that behind-the-scenes discussions will ease tensions. A US trade delegation is expected in New Delhi later this month.Prime Minister Narendra Modi, without directly referring to the tariffs, said on Thursday he was willing to 'pay a heavy price' to protect the interests of India's farmers, dairy sector and fishermen.However, as per Reuters report, Indian officials signaled they were open to lowering tariffs on some US agricultural and dairy imports, such as almonds and cheese.India, the world's third-largest oil importer, had minimal Russian oil exposure before the Ukraine war but now sources over a third of its crude from Russia.
Reuters reported that Indian state refiners, including Indian Oil, Hindustan Petroleum, Bharat Petroleum, and Mangalore Refinery, recently paused Russian oil purchases due to shrinking discounts and increasing pressure from Trump. Officials warn that exiting Russian oil altogether could trigger global price spikes. India also buys crude under flexible deals from Iraq, Saudi Arabia, the UAE, and around 40 other countries, including the US.Alongside India, Brazil is another key target of Trump's tariff actions. Both nations are part of the BRICS bloc, along with China, Russia, and South Africa.Brazilian President Luiz Inacio Lula da Silva, who currently leads BRICS, told Reuters he would call Modi, China's Xi Jinping, and other leaders to discuss a unified response.An Indian government source told Reuters that India should work to rebuild its US relationship gradually while strengthening ties with other nations hit by US tariffs and aid cuts, including BRICS and the African Union.India is already stepping up diplomacy with Russia and China. Its national security adviser is currently in Moscow ahead of President Vladimir Putin's expected visit to New Delhi this year. India's foreign minister is also due to visit.On Tuesday, Russia said both nations discussed expanding defence cooperation under their 'privileged strategic partnership.'Meanwhile, India is also re-engaging with China after years of tension following a 2020 border clash. PM Modi is also scheduled to attend a regional summit in China soon, his first visit since 2018, where he may meet Putin and Xi.India exported goods worth around $87 billion to the U.S. in FY25, including textiles, pharmaceuticals, gems, jewellery, and petrochemicals , contributing roughly 2% of India's GDP.If the proposed 50% tariff hike is implemented, pharmaceutical exports, which fall under a separate duty regime, could be the only major category to survive.The fallout could extend beyond trade. Analysts warn that friction may impact work visas for Indian tech professionals and offshoring deals. India has long relied on US visa programs and IT outsourcing, a sensitive issue in the U.S. due to domestic job losses.
With inputs from Reuters
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