• India is in talks with the US for a bilateral trade deal following the imposition of 50% tariffs by Trump.
• Trump claims India's tariffs are among the highest globally, hindering trade between the countries.
• Indian exports to the US could decline by as much as $35 billion this financial year due to tariffs.
• The Indian government deems the US tariffs "unfair, unjustified and unreasonable."
• Prolonged tariffs could result in a 0.8% reduction in India's GDP, affecting key sectors.

India is currently negotiating a bilateral trade agreement with the United States as US President Donald Trump has imposed steep tariffs of 50% on Indian goods, including a 25% penalty based on India's continued purchases of Russian oil. Commerce and Industry Minister Piyush Goyal highlighted that "we are in dialogue" with the US for this agreement, indicating proactive attempts at resolving trade tensions despite the tariffs, which took effect on August 27, according to India Times and Anadolu Agency.

These tariffs have prompted accusations from Trump that India has one of the highest tariff structures in the world, significantly impacting the trade balance between the two nations. Trump stated that the US currently does not conduct much business with India while India sells massive amounts to the US, which he characterized as a "totally one-sided disaster." He reiterated claims that India has offered to cut tariffs "to nothing," yet seemed to suggest that action was overdue, according to BBC and India Times.

Officials in India have denounced the tariffs as "unfair" and are aiming for a trade deal that does not compromise the country’s interests, particularly its agricultural and dairy sectors. In response to the tariffs, India’s exports to the US could decrease by as much as $35 billion in the current financial year, with potentially severe implications for employment in industries such as textiles and leather, according to TRT Global and BBC.

Despite the pressures, India's approach has been strategic, focusing on multiple channels of engagement, including strengthening ties with other countries such as China and Russia. The geopolitical maneuvering has been evident as Prime Minister Modi met with both Xi Jinping and Vladimir Putin during the Shanghai Cooperation Organisation summit, demonstrating a multilayered diplomatic stance while responding to US pressures, as reported by TRT Global and BBC.

The domestic economic ramifications of these tariffs are significant, with some analysts predicting a potential contraction of up to 0.8% in India's GDP if the impasse continues. Experts suggest that retaliation could be damaging, as India's exports to the US are substantially higher than the reverse. The country is advised to diversify its export markets and strengthen ties with other nations to mitigate the effects of Trump’s tariffs, according to BBC.