Open letter on why India must not give in to US tariff blackmail
Forum for Trade Justice - 30 August 2025
Open letter on why India must not give in to US tariff blackmail
US demands in FTA negotiations will mean that a foreign country forces changes in India’s policies, regulations, and laws, overriding India’s sovereignty The Trump administration has currently slapped a 50% tariff on Indian exports to the US, on grounds both economic and political and has apparently demanded duty-free access to Indian markets in return for reduction of these illegal tariffs.
Indian government has said that the negotiations with the United States are stuck on issues related to agriculture and dairy, including genetically modified (GM) food, and that India would not concede on them. We congratulate the Indian government on this firm stand. However, we feel that what may be flying under the radar are a lot of systemic law and policy issues, of huge long term importance to India in terms of its economic interests and strategic autonomy, including intellectual property (IP) policies, digital-sector policies, industrial policy, investment priorities, financial stability, and energy independence. We fear that these will get compromised, even as the Indian government declares ‘victory’ in not having relented on agriculture and dairy issues.
Meanwhile, even in agriculture, we still fear the opening of India’s agriculture sector including the import of apple, wheat, maize, soya beans, as well as dairy and poultry sectors from the US. There could also be demands to make changes to the minimum support price (MSP) scheme, especially for rice and wheat. Further, India may be required to grant access to GM food products, and feed, from the US. These concessions would have large-scale and long term disruptive impacts on both Indian farmers and India’s agrobiodiversity.
Tariffs are the most visible part of trade deals, but sometimes, as in this case, there are other equally if not even more important issues, of India’s sovereign right to make its laws, regulations and policies. It is here that, we fear, deep compromises are likely to get made, which could be largely of a permanent nature. Apart from that, it is expected that huge commercial deals, or abstaining from them (with some other countries), will be forced on India. These should remain business-to- business, or government-to-business matters, and India cannot be coerced into them.
The US has already imposed a 25% tariff on Indian goods, effective 1st August, 2025 with another 25% coming into effect on 27th August. As things stand, despite our best efforts, and giveaways, the final tariff is unlikely to go below 20% or at the most 15%, as allowed to US’s closest allies like the EU and Japan. There is no doubt that the smallest shift in tariffs matters a lot to Indian exports, since the United States is India’s largest export market. But these relatively small shifts cannot be obtained at the cost of our policy rights in key areas.
Key policy/legal coercions that are at stake
In respect of intellectual property (IP), India may be compelled to make changes to its domestic patent laws for facilitating “evergreening” of patents on pharmaceutical products. This would destroy India’s generic medicine industry, thereby resulting in a sharp increase in the cost of healthcare among the sick and poor.
As done in the UK-India FTA, hailed by the commerce minister as the ‘gold standard’ to be followed in other FTAs, it is feared that the acceptance of ‘voluntary licensing’ as the ‘preferred’ mechanism will be a virtual death knell of ‘compulsory licensing’ of otherwise unaffordable medicine, urgently needed for public health emergencies. India’s effort to use foreign technologies for clean energy and other areas will also be compromised, through such ‘voluntary licensing’ language.
In the digital arena, India may have to give a commitment not to impose taxes on exports of US digital products. In addition, it may be required to allow unrestricted cross-border data flows and implement sharing of government public data with US entities. These commitments would foreclose the possibility of generating revenue from the most vibrant economic sector, and also compromise India’s ability to create domestic digital champions especially in the artificial intelligence segment.
Like it did in the UK FTA, India is also likely to give in on committing that source code disclosure cannot be asked for, debilitating its regulatory rights and capacity in the still-forming digital arena, including Artificial Intelligence (AI). Also, like in the UK FTA, India is likely to give away regulatory rights to mandate specific authentication standards, even in sensitive areas (like notary certification for some documents). All these have serious national security implications. Such measures would greatly compromise India’s digital sovereignty — a central part of overall sovereignty — which means being hamstrung in making laws and policies in this most important emerging digital arena.
In all these matters, regarding IP, and in digital arena, if India makes these compromises, as we fear it might, this will go against India’s long-standing positions at global and national levels.
Key commercial coercions that are likely
India could also be required to open up its government procurement market for US suppliers on terms even more favorable than what India has finalised with the UK under the recently concluded FTA with that country. This fully goes against prime minister’s Atmannirbhar Bharat Abhiyan - an initiative to make the country and its citizens independent and self-reliant.
US is likely to demand that India provides firm commitment to purchase defence equipment, aircrafts, and energy products from it. The US also wants India to stop buying oil from Russia, Iran, and Venezuela; exit/weaken BRICS; and abandon efforts to trade in local currencies that bypass the US dollar.
India’s trade policy must underpin core principles of sovereignty
In short, any proposed India-US bilateral deal is less about ‘fair trade’ and more about reshaping India’s foreign and domestic policies to suit Washington and its economic and geo-political interests. It does not even remotely resemble the type of trade agreements made by two equal sovereign powers. In its haste to meet the deadlines set by the Trump administration along with its hardened stance, India may undermine its sovereignty — which is defined as its capacity to make independent policy decisions in the best interests of its own citizens.
India can and should strengthen its bilateral trade and other economic relations with US in a cooperative, trusting, and mutually beneficial environment without ceding sovereignty.
In response to the “America First” trade policy, financial sanctions, and coercive weaponization of international trade, some nations are already looking into ways to collectively maintain their economic sovereignty andtransition to a multipolar system. As India has been convening the Voice of the Global South Summits since 2023, it should proactively support such efforts at BRICS+ and other fora.
The central government should immediately engage with parliamentary committees, state governments, regulatory bodies, farmers’ unions, civil society groups, and other stakeholders to seek their inputs and suggestions on the ongoing FTA negotiations.
In the current negotiations, India’s interests will not be safeguarded by being subservient. Instead, they will be served by being resolute and firm and keeping our long-term economic prospects, developmental goals, and ecological security in mind. Our negotiators must adequately brief Prime Minister Modi on the key issues. This can ensure that President Trump does not further skew the deal that may be finalised at the official and ministerial level against India’s interest.
As this open letter is being sent out for sign-ons, the news come of Trump imposing another 25 percent tariff as ‘Russian oil import penalty’. As the nation is outraged at this hypocrisy and new coercion, it is the right occasion for the people and government to stand together in affirmation of India’s sovereignty, and not at all give any undue concessions to the US, including as discussed here. China imports more Russian oil that India does, but has not been hit by any such penalty. Therein itself might lie a lesson how India should react.
This Open Letter is Initiated by Forum for Trade Justice.
Forum for Trade Justice is a network of organisations working in the area of global trade, including framers’ associations, trade unions, traders’ groups, health associations, environment groups, and activists in various areas
The following more than fifty organisations endorse this Open Letter.
1 Forum for Trade Justice – A network of organizations
2 Alliance for Sustainable and Holistic Agriculture (ASHA)
3 Kerala Coconut Farmers Association
4 Working Group On Access to Medicines and Treatments
5 Centre of Indian Trade Unions
6 Joint Action Committee (of traders) Against Foreign Retail and E-commerce
7 Indian Drug Users’ Forum
8 Tamilnadu Farmers Protection Association
9 IT for Change
10 National Coalition of PLHIV in India
11 Shramik Bharti
12 Indian Social Action Forum - INSAF
13 Focus on Global South
14 Delhi Science Forum
15 Hawkers Joint Action Committee
16 Gig Workers Association
17 Delhi Network of Positve People (DNP+)
18 Assam Network of Positive People
19 Meghalaya User’s Forum
20 Meghalaya State Network of Positive People
21 Dimapur District user network DDUN
22 Chandel Network of Positive People CNP+, Chandel District , Manipur
23 Andhra Pradesh drug users forum
24 Mumbai TB collective
25 Delhi Network of positive
26 Kripa Foundation Nagaland
27 Rashtriya Kisan Mahasangh
28 BRICS Feminist Watch
29 Kerala Sasthra Sahithya Parishath
30 Positive women network
31 Udita Salam
32 Drug Action Forum - Karnataka
33 Assam Network of Positive People
34 Uttarakhand Association for Positive People
35 National Coalition of People Living with HIV in India
36 Maharajganj positive network
37 Pali Marwar network for people living with HIV Sansthan
38 Hazaribag district network for people living with HIV/ AIDS
39 Network of Positive People, Bhiwani, Haryana
40 Bengal Network of People Living with HIV/AIDS
41 Network in Thane by people living with HIV/AIDS(NTP+)
42 Health Care Community of Positive Peoples Ambajogai
43 Sarthi Kalyankari Sanstha Bhandara
44 Positive women network Mizoram
45 Gramya Resource Centre for Women
46 Network of Gadchroli Vihaan Bahuuddeshiya Sanstha
47 Sharan
48 Woodpeckers Initiative
49 Guruprasad Trust
50 Sarthi Kalyankari Sanstha Bhandara
51 Ashwasti
The following individuals, working in various organisations or independently, also support this Open Letter
Kavitha Kuruganti
Shalini Bhutani
Bharat Dogra
Pramod Kumar K S
Akhil Mythri
Shashank SR
Akhand Pratap
Barry Leslie Kharmalki
Surat Mukherjee
Sugam Shine
Tsewang Gyatso Sherpa
Ketho Angami
Simon W Beddoe
Surjeet Singh
Prashant Sharma
Smitha Francis
C. Saratchand
Rajarshi Ghosh
Bodapati Srujana
V Upadhyay
Knsvaradhan
Rheidol Kharkongor
Naveen Kumar Sharma
Mundrika gahlot
Vinod Mehra
Professor Uma Shankar
Aishwarya J
Abou Mere
Kartik Walia
Hari Shankar Singh
Deibormi R Passah
Jai Prakash
Prashant Jain
Sridhar Radhakrishnan
Karthik G
Reetam Bag
Shilpa Krishna
Vidhyadhara N
Swapna
Dr. N.Indira Rani
Subin Dennis
Shalini Sinha
Gyanu Yadav
Vivek Sharma
Gurmeet Singh Bawa
Purva Dhanashree
Dr Shakeel
Nachiket Udupa
Sunita Bandewar
Prof Viney
Shankar Bale
Dr. Tarak Kate
Ankush N
Dr Suhas Kolhekar
Adrija Chaudhuri
Ravindranath.
Vanita Mukherjee
Neel Kamal
Narendra Gupta
Eldred Tellis
Dr S Balaji
Ganesh Acharya,
Dr. I G Rathish
Dr. Dhiraj Singh
Dr Suman Sahai
Priya Anuragini
M. Shankar
Shramik Bharti
Richa, JSA Delhi
Dr B Ekbal
Sarojini N
Dinesh Abrol
Chinu Srinivasan
Umesh B
Ajith Kumar R
Ravindran P K,
Sandhya Srinivasan
Mukesh Varma
Ranja Sengupta
K M Gopakumar
Madhusoodanan V
Mohanan Kolikkara
Bhaskaran T
Radhika Chatterjee
Babu Puravankara
Baiju K P
Shivangi Rai
Ashok Karinghat
Harish Kumar K
V. T. Karthiayani
Ramya Sheshadri
N. Raghuram
Indranil, JSA Delhi
Gopalan M
Biswaroop Chatterjee
Subha Bharadwaj
Vidya Sagar
Laxmi Chaubey
Rashmi Yenaskar
Anita Patil
Dayanand Kumar Gupta
Hari Shankar Singh
Milind Rajwade
R. Parthesarathy
Tek Bahadur
Reena Kanekar
Chanda Thavare
P Kousalya
Afsar Jafri
Santosh Kumar Singh
For More information please contact:
• Parminder Jeet Singh, Email: parminder.js.work@gmail.com, Mob:+9198459 49445
• K M Gopakumar, Email: kmgkumar@gmail.com, Mob:+91 93729 27647
