Are India and the US Quietly Keeping Trade Channels Open Despite Tariffs?

The escalating tariff war between India and the United States has opened a new chapter of uncertainty in global trade politics, and insiders believe the next few weeks could determine whether the two democracies drift further apart or find a middle ground.

When former finance secretary Subhash Garg remarked that India had "effectively walked away" from trade negotiations, his words struck a chord among policymakers and businesses alike. For exporters already reeling from Donald Trump’s steep 50 per cent tariff on Indian goods, the statement reads less like rhetoric and more like a reflection of ground reality. With shipping containers piling up at ports and contracts being renegotiated overnight, many small and medium enterprises say they feel abandoned in a geopolitical tug-of-war.

What makes the moment especially sensitive is the human dimension. Farmers, for instance, are watching closely. Prime Minister Narendra Modi has repeatedly pledged that India will not compromise on their interests. His strong assertion that the nation is “prepared to pay any price” to safeguard the agrarian sector has raised morale in rural constituencies, but it has also deepened apprehension among urban exporters who depend on access to the American market. To them, the clash looks less like a defense of farmers and more like a collision course with livelihoods at stake.

The US, meanwhile, is sending mixed signals. Treasury Secretary Scott Bessent insists that tariffs are not just about Russian oil purchases, but also India’s slow pace in trade talks. Yet, at the same time, he strikes a conciliatory note by saying that “at the end of the day we will come together.” Such dual messaging has left Indian negotiators puzzled. One senior commerce ministry official admitted, off the record, that Washington’s words feel like “an open hand and a clenched fist offered at the same time.”

Speculation is now rife over whether India will harden its position or quietly return to the negotiating table. Some experts argue that New Delhi might use its energy partnerships with Russia as leverage, while others believe the government will focus on alternative export markets in Southeast Asia and Africa. What is certain is that India cannot afford to appear weak, either domestically before farmers or internationally before its trading partners.

Adding to the drama is a US appeals court ruling that most of Trump’s tariffs are illegal, even though they remain in place for now. While the decision offers a sliver of hope for Indian exporters, it also underscores the volatility of America’s trade politics. Should the Supreme Court intervene, the uncertainty could drag on for months, leaving businesses in limbo.

For ordinary people, the technicalities of tariffs and negotiations translate into a simpler anxiety: higher prices and fewer opportunities. Importers fear consumer goods could cost more. Exporters dread losing long-held clients in the US market. And for farmers, who are often caught between promises and policies, the assurance of protection may not offset the fear of shrinking demand.

At its heart, this is no longer just a question of trade policy. It is about trust, resilience, and whether India and the US—two nations that often call themselves strategic partners—can navigate an economic storm without capsizing the relationship.

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