First reaction from Washington on India-EU deal: Trump’s trade chief says ‘India comes out on top’

“First of all, strategically, it’s important to understand that because President Trump has prioritised domestic production and essentially started charging a fee for other countries to access our market, these countries are trying to find other outlets for their overproduction. And so the EU is turning to India to try to find a place. The EU is so trade-dependent. They need other outlets that they can’t keep sending all their stuff to the US,” Greer said.

This comes days after US Treasury Secretary Scott Bessent also criticised the EU for not exerting pressure on India over Russian oil. He said that it was the US tariffs that resulted in a collapse of Indian purchase of Russian oil when “virtue signalling European allies” refused to do it because they wanted to sign a “big trade deal” with India.

Bessent said that before the Ukraine invasion, approximately 2-3% of oil that went into Indian refineries came from Russia and that the comparable number went up to 18-19%, helping India make “huge profits”. “…but in the ultimate act of irony and stupidity, guess who was buying the refined products from the Indian refineries made from Russian oil… the Europeans. They are financing the war against themselves,” he said.

Uncertainty in US trade policy has been a key driver of the India-EU trade agreements. Both trade partners have been under pressure from Washington, as it remains the largest export market for both New Delhi and Brussels. While the Indian labour-intensive sectors have been facing 50% tariff, relations between the EU and US remain volatile despite a trade deal.

The US agreed to lower tariffs on the EU to 15% last year under a deal that remains unpopular in Europe due to limited gains for Brussels and was largely seen as a strategic agreement rather than an economic agreement amid the ongoing Ukraine war.

Earlier this month, US President Donald Trump threatened to dramatically raise tariffs up to 30% on the EU for opposing his plans to take over Greenland. The threats paused only after the EU threatened retaliation, leading to a fresh framework agreement on Greenland.

Brussels and Washington are also clashing over tech regulations. The US state department in December barred five Europeans, including the EU’s former Internal Market Commissioner Thierry Breton and four members of digital campaign groups, from entering the US over “censorship” of tech platforms.

Meanwhile, US tariffs on India have remained unchanged since August last year. Exporters are now worried about the permanent loss of the market in the US as American buyers are no longer placing orders, and Indian competitors such as Vietnam and Bangladesh have begun benefiting. The tariff measure by the US has also impacted investments in India and has resulted in an outflow of foreign portfolio investment.

Seeking immediate support from the government, the apparel exporters last week wrote to Vice President CP Radhakrishnan, citing worries of job losses on account of US tariffs.

The exporters said that market diversification is not a short-term option as textile sourcing is embedded in long-term buyer supply chains and developing alternate markets requires “2-3 years for buyer onboarding, compliance audits, and volume scaling”.

“Abrupt loss of the US market will lead to permanent customer displacement and allow competitor nations with preferential access to replace India,” the Apparel Export Promotion Council said, while seeking interim protective measures for textile exports pending treaty conclusion.