India is weighing options to placate the White House, including boosting imports of U.S. goods, but has ruled out buying F-35 fighter jets, according to a Bloomberg report citing people familiar with the matter.
Officials told Bloomberg that while natural gas, communication equipment, and gold purchases may be increased to help narrow India’s trade surplus with the U.S. over the next three to four years, no defence purchases are being planned.
This comes after US President Donald Trump announced a surprise 25 percent tariff on Indian goods starting August 1, catching New Delhi off guard.
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Shock and disappointment in New Delhi
Officials in New Delhi were reportedly 'shocked and disappointed' by Trump’s announcement, Bloomberg said, but remain eager to keep bilateral trade talks on track.
Commerce Minister Piyush Goyal told Parliament on Thursday that the government is engaging exporters and industry groups to assess the impact. “The implications of the recent developments are being examined,” Goyal said, promising “all necessary steps to secure and advance our national interest.”
No immediate retaliation, but WTO option open
Sources told Bloomberg that India is not considering immediate retaliation but has reserved the right to respond to higher U.S. duties on steel and automobiles at the World Trade Organisation at a time of its choosing.
Trump’s criticism: High tariffs and Russia ties
Trump on Wednesday slammed India’s high tariffs and 'strenuous and obnoxious' trade barriers while threatening penalties over its continued purchases of Russian oil and weapons.
Hours after saying talks with New Delhi were ongoing, Trump posted on Truth Social that he “doesn’t care what India does with Russia,” referring to both nations as 'dead economies'.
The U.S. had a trade deficit with India of about $43 billion in 2023, making it the 11th largest, well below Vietnam’s $121 billion, according to IMF data.
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US officials blame India for slow talks
US Treasury Secretary Scott Bessent told CNBC that the “whole trade team has been frustrated” with India for slowing negotiations. He also criticised India for not being a 'great global actor,' pointing to its close ties with Russia.
Defense partnership over purchases
Despite US pressure, India is not interested in purchasing F-35 jets, Bloomberg reported. Instead, the Modi government is pushing for joint design and manufacturing of defense equipment rather than buying expensive American warplanes outright.
The Ministry of Defence did not respond to Bloomberg’s request for comment. Moneycontrol could not independently verify the report.
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