From late August 2025 all Indian goods entering the American market are confronted by some of the world’s steepest barriers. The US has imposed tariffs reaching 50% on most Indian exports. This measure followed an initial US surcharge of 25% in early August, swiftly doubled after Washington cited India’s purchase of Russian oil and military equipment.

These moves have driven up costs for everything from Indian apparel and gems to chemicals and machinery, creating new uncertainty for exporters and endangering jobs across India’s export-driven sectors. Until these tariffs came into force, Indian shipments into the US typically faced duties that rarely exceeded 10%.

The abrupt escalation overturned decades of gradual market opening and pushed Indian policymakers to urgently explore fiscal measures and domestic reforms to soften the blow. Even in this fraught environment, India continues talks with the US.

Leaders in both countries publicly affirm that they want to keep the trade relationship on track.

Bilateral engagement remains active, although timelines and meetings have shifted due to ongoing disagreements. While Washington pushes for greater access to Indian agricultural and dairy markets, Delhi insists on protecting rural livelihoods and the interests of small farmers rather than opening the doors all at once.

This mix of confrontation and negotiation sums up the approach on both sides, commercial rivalry, friction on energy and defence policy, but an underlying mutual interest in eventually reaching a broader agreement.

India’s approach to these negotiations reveals the levers at its disposal. The trade relationship is not only about large manufactured exports or headline services but also hinges on unique agricultural and specialty commodities.

Guar gum, for instance, is not just a crop but a strategic bargaining chip. According to Agricultural and Processed Food Products Export Development Authority (APEDA) of India’s website, the country produces roughly four of every five kilograms of guar in the world, and the US remains among its most important buyers.

Guar gum is irreplaceable in uses ranging from oilfield fracking fluids to processed foods and pharmaceuticals. According to a July 2022 article in Quartz, surging demand from the US shale industry in the last decade dramatically increased the value of Indian guar, briefly altering the fortunes of rural farmers and creating an international feedback loop that is rare for niche commodities.

Beyond guar gum, India’s suite of agricultural exports, spices, basmati, cotton, tea, extends its influence in trade talks. Geographic indication labelling for these products allows India to demand protection for its branding and cultural identity as part of broader trade frameworks. These debates centre not just on tariffs but on quality standards and origin certification that anchor such products to Indian soil and skilled labour.

India’s power in negotiations is amplified by its enormous services sector and digital economy.

The US relies heavily on Indian IT talent, and that reliance gives India room to push for better recognition of its professional degrees, simplified business travel requirements, and expanded digital trade. India’s pharmaceutical sector, with its proven capacity for generics and vaccine supply, proved essential during the global pandemic, underlining this sector as a foundation for both commerce and public diplomacy.

Even under punitive tariffs, India’s market size and demographic momentum offer leverage. Global companies see entry into India’s growing consumer base as a pearl worth negotiating for, and Delhi wields the promise of expanded market access as a tool for reciprocal gains. Agricultural subsidies and price supports at home have sparked disagreements at the World Trade Organization, but they are also a practical lever for India’s negotiators who must keep millions of farmers and rural households afloat amid international turbulence.

India’s trade strategy faces new challenges and opportunities in an era where climate concerns, supply chain security, and the recalibration of global alliances are reshaping markets.

Commodities like guar gum, prized for their biodegradable qualities and critical industrial roles, offer new kinds of influence as environmental standards and resource security become more central in future deals.

India’s negotiating style values resilience and adaptability, seeking to absorb shocks while patiently building toward more secure and mutually beneficial trade frameworks.

Even as the US piles on tariffs, India’s steady if sometimes slow approach ensures its bargaining chips, whether a crop like guar, strategic services, or a massive domestic market, stay relevant at the international table. The evolution of this relationship is likely to remain a test case in modern trade diplomacy.