The Blubber

India is not expected to respond immediately to President Donald Trump’s newly imposed tariffs and is instead prioritizing negotiations for a bilateral trade agreement with the United States aimed at reducing duties, according to a senior Indian government official.

The official emphasized that India is pursuing dialogue over confrontation, adding that the country sees itself as having a first-mover advantage in the region. The government aims to develop a trade pact that is both balanced and equitable, the official said.

Discussions will include a range of topics, covering both goods and services, and all options are on the table, according to the official. The government is also engaging with exporters to assess the potential impact and will provide support to those who request assistance.

Trump’s announcement last week of a 26% tariff on goods imported from India delivered a blow to Indian exporters and heightened risks for an economy already grappling with weak consumer demand. While a successfully negotiated lower tariff could bring some relief, broader global trade tensions remain a significant concern.

During a recent visit to Washington following Trump’s return to office, Indian Prime Minister Narendra Modi and the U.S. president agreed to work toward finalizing a bilateral trade agreement by the fall.

The new tariff measures represent a setback for Modi’s administration, which had already made a series of concessions on trade and immigration and expressed openness to further reduce import duties on American products during a visit by U.S. trade officials to New Delhi last month.

India’s approach differs from that of neighboring China, which retaliated swiftly by announcing a 34% tariff on all U.S. imports.

Despite the announcement, India’s stock markets showed resilience. The NSE Nifty 50 Index outperformed many of its Asian counterparts last week, with the impact of the tariffs perceived to be less severe than for other regional economies.