'Mixed Bag, Not a Setback': Indian’s First Response to Trump’s 26% Tariff Shock

India faces a major economic challenge as the United States slaps a 26% reciprocal tariff on Indian goods, a bold move by President Donald Trump aimed at nations imposing high tariffs on American products. The Indian commerce ministry is urgently assessing the impact of this sweeping decision, set to be rolled out in two phases—10% from April 5 and the remaining 16% from April 10.

A senior government official attempted to downplay concerns, calling the situation a "mixed bag, not a setback," but acknowledged the potential repercussions. “The ministry is analysing the impact of the announced tariffs. There is a provision that if a country addresses US concerns, the Trump administration may consider reducing duties,” the official said.
 

Trump Tariff Impact

This dramatic move is part of Trump’s "Liberation Day" declaration on April 2, a fiery speech from the White House’s Rose Garden, where he promised to revive American industry and reclaim economic dominance. Holding up a tariff chart, Trump pointed to India’s 52% tariffs on US goods, including what he called unfair currency manipulation and trade barriers. He announced the 26% tariff on India as a "discounted" rate compared to the duties imposed by New Delhi.
“India, very, very tough. Very, very tough,” Trump remarked. “The prime minister just left. He’s a great friend of mine, but I said, you’re a friend of mine, but you’re not treating us right. They charge us 52%...,” he added further. 

The tariffs pose a serious complication to the ongoing US-India negotiations for a bilateral trade agreement, which both nations aim to finalize by fall 2025. The move also comes as India grapples with other economic challenges, including a slowing global economy and rising inflation. As India braces for the fallout, industry experts warn of disruptions in sectors heavily reliant on US exports. The coming weeks will reveal whether the “mixed bag” of impacts will weigh heavily on India’s trade and economic outlook.

Despite sweeping tariffs imposed by Trump on India and its neighbours such as Vietnam, Cambodia, Pakistan , Sri Lanka, India is set to gain in the long run in few sectors such as gems, jewelry, leather, textile etc. “I think it is almost a good thing for India because I think, like you said, our competitor nations like China, like Vietnam, like Cambodia, have all gotten substantially higher tariffs than India,” economist Rahul Aluwalia told Republic Business .