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India wants to move quickly on a trade deal with the United States, a government official told Reuters. "India is one of the first nations to start talks over a deal with the United States and to have a jointly agreed to a deadline to conclude it."
Read More: Trump announces 90-day 'pause' on reciprocal tariffs for all but China, raises tariff on China to 125%
He added that the move reflects a strategic pause aimed at avoiding immediate economic fallout while allowing space for potential resolutions.
"A huge relief to our exporters. The 90-day deferral of the reciprocal tariff provides a critical window for diplomatic engagement and trade negotiations," Ralhan added.
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"For example in textiles, we can import different types of yarns from China and produce garments for exports. It's a good opportunity for the elephant and dragon to come together. I think the pause would be extended further beyond 90 days and things will be normalised," Saraf, who exports to the US, said.
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The relief comes after Reserve Bank of India (RBI) governor Sanjay Malhotra on Wednesday highlighted risks to growth and inflation from the tariff war and policy uncertainties, with both businesses and households deferring investments and discretionary consumption, respectively, across industrial economies. "The dent on global growth due to trade frictions will impede domestic growth. Higher tariffs shall have a negative impact on net exports," Malhotra said.
The central bank has projected 6.5% growth in FY26, lower than the 6.7% predicted earlier, reflecting the impact of global trade and policy uncertainties.
"Our exports overall are 12% of GDP and less than 2% for the US. Compared to that (exports for) China is about 19% (of GDP) and Germany is 37% and even the EU is 30% plus. Smaller countries like Vietnam, Taiwan etc are at 80%. To that extent we are better placed compared to some of the countries that's why you see the reciprocal tariffs are lower for India because our surplus vis a vis those countries is much less. So, we may have a comparative advantage," he said.
'No FTA with US'
As Donald Trump announced pause on tariffs for 90 days for trade negotiations, India should avoid signing a comprehensive Free Trade Agreement (FTA) with the United States, as it may require India to make harmful trade-offs, suggested Global Trade Research Initiative (GTRI).
Instead, GTRI said, India should consider a limited "Zero-to-Zero" tariff deal on 90 per cent of industrial goods, a model already offered by Europe to the U.S.
It said, "Avoid a comprehensive FTA with the US as it would force India to make damaging concessions. It's a deal that would cost India more than it gains. Restrict to Zero for zero deal on 90 per cent industrial Goods. Europe has offered similar deal to the US."
The report warned that a full FTA with the US could turn out to be a costly mistake. It highlights several demands by Washington that could hurt India's key sectors.
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Why India should be cautious
The Trump tariffs without the pause were likely to hurt the Indian economy by 20-50 basis points, with Asia's third largest nation could lose around $31 billion, according to the Emkay report. With a cooldown period, India will have a chance to further continue its bilateral talks with the US counterparts for relief.
Among the most vulnerable sectors are apparel and gems/jewellery, which are exposed to the full brunt of the tariffs.
In an attempt to mitigate the impact of US tariffs, India has reportedly offered tariff cuts on a range of US imports, particularly agricultural products. In recent negotiations with the US, India has proposed reducing tariffs on items like almonds, cranberries, and bourbon whiskey—key US exports that have been identified as part of the broader trade talks. Reuters has reported that India is willing to offer tariff cuts on more than half of US imports worth $23 billion, marking the biggest concession in years.
While the immediate focus is on the implementation of tariffs, the broader picture remains India’s ambition to double bilateral trade with the US to $500 billion by 2030 from the current $190 billion.
Donald Trump creates chaos, then stops briefly
Amid a global market meltdown, US President Donald Trump on Wednesday abruptly backed down on his tariffs on most nations for 90 days, but raised the tax rate on Chinese imports to 125 per cent.
However, the 10 per cent tariff will be there. It came into effect on April 5. The US had imposed additional import duty of 26 per cent on India.
After days of turmoil, stocks on Wall Street and across Asia saw huge surges in reaction to Trump's announcement that he was halting a levy hike for almost all nations for 90 days.
Trump also predicted that trade deals will be made with all countries, including China, which has for now refused to roll back retaliatory tariffs on US goods.
"A deal's going to be made with China. A deal's going to be made with every one of them," Trump said, adding however that China's leaders "don't quite know how to go about it."
