India must learn a crucial lesson from recent U.S. tariff actions against China: no trade agreement with the United States is truly set in stone. This is the stark warning from Ajay Srivastava, former Director General of Foreign Trade and founder of the Global Trade Research Initiative (GTRI). He asserts that India should concentrate on fostering self-reliance while strategically balancing its economic relationships with both Western powers and the BRICS bloc.
Srivastava’s commentary follows U.S. President Donald Trump’s October 10 announcement of a formidable 100% tariff on various Chinese goods, effective November 1, 2025. This move elevates the total tariff rate on Chinese imports to approximately 130%. The U.S. action was a direct response to Beijing’s decision on October 9 to implement new controls on its rare earth exports.
Under China’s revised regulations, any product containing more than 0.1% of Chinese-origin rare earths, or manufactured using Chinese refining or magnet-making technology, will now require Beijing’s explicit approval before export. Given that China dominates over 70% of the world’s rare-earth refining capacity, these controls represent a significant geopolitical and economic leverage.
“The message for India is unmistakable: U.S. deals are never final,” Srivastava emphasized in a recent note. He pointed out that the much-lauded U.S.-China “Phase One” trade deal of 2025, which initially capped U.S. tariffs at 30% and China’s at 10%, has been rendered obsolete by this latest 100% duty order. This demonstrates the volatile and often unilateral nature of U.S. trade policy.
Therefore, India is urged to approach its own trade negotiations with the U.S. with extreme caution, ensuring talks are conducted on equal terms. Srivastava advised, “Instead of banking on unreliable U.S. commitments, New Delhi should strategically invest in building self-sufficiency in critical technologies and minerals. This approach will shield its economy from future trade disruptions, while simultaneously allowing India to leverage its neutral standing to fortify ties with both Western economies and its BRICS partners.”
India’s trade discussions with the U.S. have indeed been tumultuous. The most recent formal round of negotiations for a Bilateral Trade Agreement, originally scheduled for August, was indefinitely postponed after the U.S. imposed cumulative 50% tariffs on Indian imports that same month.
Despite these setbacks, efforts to ease tensions are underway. Commerce Minister Piyush Goyal visited the U.S. in late September for discussions with U.S. Trade Representative Jamieson Greer. However, the exact date for the resumption of formal bilateral trade negotiations remains unannounced, underscoring the ongoing uncertainties in India-U.S. trade relations.