Highlights:
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India has made a “final” trade offer to the US aimed at easing additional tariffs on Indian exports.
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India has proposed tariff concessions on almonds, walnuts, apples, and selected industrial goods.
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India exporters are absorbing higher duties to retain access to the US market despite lower margins.
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The US has excluded India from Pax Silica, a coalition focused on critical minerals and AI supply chains.
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Pax Silica includes US allies such as Japan, the UK, Australia, South Korea, and the UAE.
India has submitted what it describes as a “final” trade offer to the United States in an effort to secure the rollback of additional tariffs imposed by the Trump administration, even as broader economic and strategic ties face pressure following India’s exclusion from a new US-led supply chain initiative known as Pax Silica.
The move comes amid continuing negotiations over a proposed Bilateral Trade Agreement between India and the US. According to The Hindu, the Indian government has offered significant tariff concessions as part of this latest proposal, including the immediate removal of duties on imports such as almonds, walnuts, apples, and selected industrial goods. The concessions are intended to persuade Washington to lift additional tariffs of up to 25 percent on Indian exports.
These tariffs were imposed in response to India’s continued purchase of Russian oil, a point of contention in US-India trade relations. New Delhi has maintained that energy security considerations require diversified sourcing, even as it seeks to manage trade tensions with Washington.
India aims to protect exporters from higher US tariffs
An anonymous Union government official was quoted as saying, “India has offered the US team a revised deal. This is the final offer that India can make.” The official added that the core objective for India was the removal of additional levies that have significantly affected exporters.
“Indian exporters have told the government that they can deal with 25 per cent tariffs since the lowest global tariff is 19 per cent, but 50 per cent tariffs are hurting,” the official said.
Exporters from India are currently absorbing higher costs to retain their foothold in the US market, despite shrinking profit margins. A second official told the newspaper that exporters view this approach as preferable to losing American customers and having to re-enter the market at a later stage.
According to this official, “the two teams of negotiators have broadly done what they can; the ball is in Trump’s court to accept the deal or not.”
India-US talks continue amid mixed signals
US Trade Representative Rick Switzer visited New Delhi for two days, concluding his visit on December 12. Union Commerce Minister Piyush Goyal clarified that the visit was not directly linked to the ongoing trade negotiations, though it coincided with discussions on broader economic engagement between India and the US.
Separately, US Trade Representative Jamieson Greer told the US Senate Appropriations Committee that the proposals recently submitted by India were the “best we’ve ever received as a country.” The remark was seen as an acknowledgment of India’s flexibility in the current round of talks, even as no formal agreement has yet been announced.
India excluded from Pax Silica initiative
While trade negotiations continue, India has faced a setback on the strategic front. The United States has excluded India from Pax Silica, a new initiative focused on building secure supply chains for critical minerals, energy inputs, and advanced technologies that support artificial intelligence development.
According to a US State Department statement, the inaugural Pax Silica summit will include Japan, South Korea, the Netherlands, the United Kingdom, Israel, the United Arab Emirates, and Australia. “Together, these countries are home to the most important companies and investors powering the global AI supply chain,” the statement said.
The exclusion of India has triggered criticism from opposition parties, which argue that New Delhi’s strategic and economic interests have been undermined at a time when global supply chains are being restructured.
India and the future of AI supply chains
The Pax Silica initiative is aimed at reducing dependence on what the US describes as coercive suppliers while safeguarding materials critical to artificial intelligence and advanced technology development. The US State Department said the initiative is “rooted in deep cooperation with trusted allies” and seeks to “reduce coercive dependencies, protect the materials and capabilities foundational to artificial intelligence, and ensure aligned nations can develop and deploy transformative technologies at scale.”
Participating countries have committed to joint projects to address vulnerabilities in AI-related supply chains. These include critical minerals, semiconductor design and fabrication, logistics networks, computing infrastructure, and energy grids. Planned collaborations also extend to trusted technology ecosystems such as ICT systems, fiber-optic networks, data centers, and foundational AI models.
India balances trade priorities and strategic positioning
For India, the parallel developments highlight the complexity of managing trade negotiations and strategic partnerships simultaneously. While New Delhi continues to push for tariff relief and stable access to the US market, its exclusion from Pax Silica raises questions about India’s role in emerging global technology alliances.
As talks over tariffs move toward a possible conclusion, India’s ability to navigate economic diplomacy while safeguarding long-term strategic interests is expected to remain under close scrutiny, both domestically and internationally.
