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Warning against India's over-reliance on trade talks

Published July 25, 2026 at 10:32 AM UTC

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Relying primarily on trade talks to counter US tariffs may leave India vulnerable to long-term economic damage. The forced labour provision and drug tariff plan are not just trade measures but reflect deeper US policy shifts toward self-sufficiency and human rights enforcement. Negotiations may win temporary exemptions, but they cannot address structural issues like India's labour compliance gaps or its dependence on the US pharmaceutical market. The drug tariff, if imposed, would hurt Indian generics makers who have already faced price erosion and regulatory scrutiny. Over-focusing on diplomacy could divert attention from necessary domestic reforms, such as modernizing labour laws and diversifying export destinations. Smaller economies like Bangladesh and Vietnam are already positioning to capture lost Indian business. Without proactive internal changes, India risks losing its competitive edge permanently, regardless of the talk outcome.