In a resolute address on August 7, 2025, Prime Minister Narendra Modi emphasized India's unwavering commitment to safeguarding the interests of its farmers, fishermen, and livestock holders, despite escalating trade tensions with the United States. Modi's remarks came in response to the U.S. imposing an additional 25% tariff on Indian goods, raising the total duties to 50%, a move described by the U.S. as a "penalty" for India's continued purchase of Russian oil.

Addressing the MS Swaminathan Centenary International Conference in New Delhi, Modi stated, "For us, the interest of our farmers is our top priority. India will never compromise on the interests of farmers, fishermen, and dairy farmers. I know, we will have to pay a heavy price for it, and I am ready for it. India is ready for it."

The U.S. tariffs have intensified the trade standoff between the two nations, with President Donald Trump previously criticizing India for not reducing tariffs on U.S. goods sooner. Despite this, Trump acknowledged that India has now proposed zero tariffs. However, the recent doubling of tariffs on Indian imports to 50% has raised concerns in New Delhi. India's chief economic adviser warned that these tariffs could negatively impact the country's GDP by half a percent.

In response to the escalating trade tensions, India has initiated consultations with exporters, industry bodies, and relevant stakeholders to assess the potential impact of the new U.S. trade actions and to formulate an effective response strategy. The objective is to safeguard the interests of a broad spectrum of the Indian economy, including farmers, laborers, entrepreneurs, industrialists, exporters, and micro, small, and medium enterprises .

The Modi administration has also emphasized the need to diversify trade relationships and strengthen economic resilience. Proposed solutions include enhancing trade ties with China and the European Union, reducing protectionist policies, and implementing domestic reforms to cut internal trade barriers, ease logistics bottlenecks, and reform land and labor laws. These measures aim to bolster India's economic position amid external pressures.

As the trade negotiations continue, both India and the U.S. have expressed optimism about reaching a mutually beneficial agreement. President Trump has indicated ongoing discussions with Prime Minister Modi, aiming to resolve trade barriers and strengthen bilateral relations. The outcome of these negotiations will significantly influence the future economic dynamics between the two nations.