Trump has slapped steep tariffs on India. Here's why New Delhi did not rush into a deal with Washington

President Donald Trump on Wednesday announced 25% duties on imports from India and an unspecified "penalty," but the country has so far appeared unfazed by tariff threats

Experts cite its relatively limited goods exports as a key reason.Even as the U.S. announced deals with other countries, such as with Japan that addressed sticking points on greater market access for American autos and agricultural ducts, India did not rush into an agreement.The country has resisted greater market access for American agricultural ducts to tect its local farmers, who form a sizable voting bloc

In its trade deal with the U.K., signed last week, India managed to safeguard its most sensitive agricultural sectors from tariff concessions.India is not "backing off" because their exports to the U.S. constitute a small part of their economy and it cannot afford to open its agricultural sector to U.S. companies, said Carlos Casanova, senior economist at UBP

America's goods imports from India totaled $87.4 billion in 2024, according to U.S. government data.India's Commerce and Industry Minister Piyush Goyal has acknowledged that the sector was sensitive to India in an interview with CNBC last week."We are always very sensitive to the interests of our farmers, the interests of our [Micro, Small, and Medium Enterprises], and will ensure that our areas of concern are well tected," Goyal said.The bilateral trade agreement between India and the U.K. "set a tone to all the Western powers" that New Delhi is ready to trade on its own terms, Sameep Shastri, vice chairman of the BRICS Chamber of Commerce and Industry, told CNBC.Harsha Vardhan Agarwal, president of the Federation of Indian Chambers of Commerce & Industry said in a statement that while the U.S. duties will impact India's exports, "we hope that this imposition of higher tariffs will be a short-term phenomenon and that a permanent trade deal between the two sides will be finalised soon."Analysts told CNBC before the tariff announcement that Washington had good reasons to finalize an agreement sooner rather than later with India."Strategically, the U.S. has little interest in alienating India

It sees India as a strong partner that can shape the Indo-Pacific landscape," Harsh V

Pant, Vice President of Studies and Foreign Policy at Observer Re Foundation, told CNBC

Get a weekly roundup of news from India in your inbox every Thursday. now Strategic hedge against ChinaBringing manufacturing back to the U.S., especially from China, has been a central tenet of Trump's economic policy.As the Trump administration is largely focused on countering China's arrival on the global stage, India represents a potential alternative to China in global manufacturing, analysts told CNBC."We still expect India to remain a beneficiary of the China plus one strategy, as diversification is a bigger driver of this trend," market re firm Asia Insight said in a note.India's role in managing this great power rivalry "very, very, critical," said Pant.As America "positions itself against China's reach into global supply chains," shifting manufacturing to India becomes a natural "commise", and might even complement the shift back into the U.S.," Vishnu Varathan, head of economics and strategy at Mizuho Bank, said.For example, the U.S. could control some of the higher end of the manufacturing chain, which requires more nology and skilled labor, while India "complements it with cheaper labor," Varathan added.In doing so, India might be able to "cut China out and position the U.S. more strategically," all while walking the diplomatic tightrope, added Varathan.watch now3:0303:03India hopeful on U.S. trade deal: Indian Minister of Commerce & IndustrySquawk Box AsiaWalking the BRICS tightropeIndia's role in the BRICS, a group of 10 emerging economies, which includes Brazil, Russia, India, China and South Africa, could also give New Delhi "a degree of flexibility in U.S.-India deals," Observer Re Foundation's Pant said.According to the Carnegie Endowment for International Peace, the bloc aims to challenge Western-led global economic institutions and reduce the dominance of the U.S. dollar in the global economy.On July 6, U.S

President Donald Trump threatened an additional 10% tariff on countries that align with the "Anti-American policies of BRICS," just as Indian Prime Minister Narendra Modi was on a high-file visit to Brazil for a BRICS summit.Trump repeated his threat over a week later, saying on July 18 that he would "hit [BRICS] very, very hard" if they ever "really form in a meaningful way." "We can never let anyone play games with us," he added.watch now4:2504:25Peter Navarro: White House moving 'as fast as possible' on India trade dealSquawk on the StreetWithin BRICS, India is facing increasing pressure from China, which sees New Delhi as "competing for a leadership role" in the bloc, according to Mizuho Bank's Varathan

As such, it appears that India would be useful to the U.S. as a counterbalance to China in the BRICS.Trump has also claimed that BRICS wants to "take over the dollar" through the creation of an alternative reserve currency, despite denials from members of the bloc.This could be another bargaining chip in India's negotiation arsenal with the U.S., Varathan said, as India could work to eventually "convince Trump that they are not on board with the plan for an alternate currency."He added that India could focus on what it can offer to the U.S., which might incentivize Trump to "treat them a little better because he sees them as being aligned."India's Plan BIndia has been pushing for more trade deals even as it continues to negotiate with the U.S

Sarang Shidore, director of the global South gram at the Quincy Institute, pointed out in ed s that this is part of India's "increased turn toward a multi-alignment strategy."Besides the deal with the UK, India is in advanced talks on trade agreements with Maldives, the EU, and more, all while "retaining its strong link with Washington as its biggest global partner," according to Shidore.This diversification gives India leverage, both at the negotiating table and in navigating global economic shocks

Higher tariffs or pressure on difficult concessions, could mpt India to accelerate deals elsewhere, thereby softening the blow.More than just a hedging tactic, Shidore thinks this apach reflects India's broader worldview: A rising power that aims for multilateralism while "championing the Global South."watch now5:1405:14Not an option for U.S. to lose access to India's large consumer market: BRICS Chamber Vice ChairInside India