India Has ‘Effectively Walked Away’ From US Trade Talks Amid Tariff Dispute, Ex-Finance Secretary Says

Former finance secretary Subhash Garg says India has walked away from US trade talks after 50% tariffs on Indian goods. Modi vows to protect farmers’ interests.

US Court Rules Trump Tariffs ‘Illegal’

Source : PTI

Former Indian finance secretary Subhash Garg has reacted sharply to US Treasury Secretary Scott Bessent’s explanation for imposing a 50% tariff on Indian goods, asserting that New Delhi has already “effectively walked away” from ongoing trade negotiations with Washington.

The tariffs, which came into effect last week, were justified by Bessent not only over India’s purchase of Russian oil but also due to the prolonged nature of trade talks. Speaking to Fox Business, Bessent noted, “I’d thought we’d have a deal in May or June; that India could be one of the earliest deals. But they kind of tapped us along.”

Despite the delay, Bessent maintained a conciliatory tone, adding, “India is the world’s largest democracy. The US is the world’s largest economy. I think at the end of the day we will come together.”

Garg, however, was less optimistic. In an interview with NDTV, he said the imposition of unilateral US tariffs has essentially stalled negotiations. “No one can trade at those tariff levels. But India should never formally close the door; one must always hope sanity prevails at some point,” he remarked.

Bloomberg has reported that informal communication between India and the US continues, even as trade discussions remain paused. A senior official from India’s Ministry of Commerce and Industry, speaking on condition of anonymity, confirmed that while trade talks have been postponed, channels for defence, foreign policy, and other strategic issues remain active.

India’s Stand on Russian Oil Purchases

Garg also defended India’s purchases of Russian crude, noting that the country operates well within the global price-cap framework. He warned that yielding to US pressure would “only embolden the US, not serve India’s interests.”

Earlier reports suggested that while India views Trump’s tariff hikes as “unjustified,” it has maintained a willingness to negotiate a trade deal. Sources told HT that India’s response to the US move has been measured and responsible, with ongoing contacts aimed at reaching an understanding.

Calls for Flexibility in Negotiations

Highlighting India’s own negotiation approach, Garg suggested reconsidering the country’s “rigid” stance on agricultural and consumer goods. “We’ve been too inflexible on things like GM oils or dairy. Farmers’ interests are not really hurt by these imports. It’s about consumer preference, and that should come with a choice, not bans,” he told the media.

Subhash Garg previously served as India’s finance secretary for four months in 2019 and held the office of economic affairs secretary from 2017 to 2019.

Modi Reaffirms Support for Farmers

Earlier this month, Prime Minister Narendra Modi reiterated India’s commitment to protecting farmers’ interests, stating that the country is ready to pay any price. “The interests of our farmers are our topmost priority. India will never compromise the interests of its farmers, its cattle rearers and fisherfolk,” Modi said, adding, “I know I’ll have to pay a big price for this personally, but I’m prepared. India today is prepared to protect its farming community at any cost.”

Last week, Modi reinforced this stance, emphasizing, “The pressure on us may increase, but we will bear it all.” Sources familiar with the matter told HT that India will not compromise on the interests of farmers, small producers, and MSMEs in all talks with the US. “We believe issues will be resolved in negotiations, but there will be no going back on our red lines,” they said.

US Court Rules Trump Tariffs ‘Illegal’

In a blow to Donald Trump, a divided US appeals court ruled last Friday that most of the tariffs imposed on several countries are illegal. The US Court of Appeals for the Federal Circuit, however, allowed the tariffs to remain in effect until October 14 to give the administration time to appeal to the Supreme Court. Trump insisted that all tariffs would continue, calling the ruling by a “highly Partisan Appeals Court” incorrect.