India Pursues Strategies to Address Trump’s Reciprocal Tariffs

India is strategizing to deal with reciprocal tariffs imposed by the Trump administration. Discussions between Prime Minister Modi and President Trump established a goal of USD 500 billion in annual trade by 2030, striving for equitable terms in trade. Commerce Minister Piyush Goyal’s current talks in Washington reflect this commitment, as India shows readiness to negotiate lower tariffs in select sectors. U.S.-India trade reached USD 190 billion in 2023, confirming strong bilateral ties amidst tariff challenges.

India is exploring effective strategies to navigate the tariffs imposed by the Trump administration. President Trump has indicated that tariffs should be reciprocal, highlighting that several nations, including India, impose significantly higher tariffs on U.S. products than the other way around. He noted, “India charges us auto tariffs higher than 100 per cent. China’s average tariff on our products is twice what we charge them. And South Korea’s average tariff is four times higher.”

In discussions between Prime Minister Narendra Modi and President Trump on February 13, both parties expressed a commitment to negotiating a comprehensive trade deal and set an ambitious goal of achieving USD 500 billion in annual trade by 2030. The intention is to address the trade deficit by establishing new, equitable trade terms through a bilateral trade agreement (BTA). This agreement aims to reduce tariff and non-tariff barriers and enhance supply-chain integration in various sectors.

Commerce Minister Piyush Goyal is currently in Washington to engage in talks with U.S. officials including Trade Representative Jamieson Greer regarding the proposed trade deal. New Delhi remains optimistic about avoiding the reciprocal tariffs currently being enacted by the Trump administration. Since taking office, the President has labeled India a “tariff king” due to its high tariffs on imports.

In India’s recent Union budget, the government has announced plans to lower tariffs in select sectors, such as on Bourbon whiskey, wines, and electric vehicles, indicating a willingness to negotiate and foster bilateral trade relations. The U.S. urges India to increase imports of American oil, gas, and military equipment to balance the existing USD 45 billion trade deficit favoring India. In 2023, U.S.-India bilateral trade reached USD 190 billion, marking the U.S. as India’s largest trading partner.

In summary, India is taking proactive steps to address the tariffs set by the Trump administration, with ongoing negotiations pointing towards a more equitable trade agreement. The impending Bilateral Trade Agreement aims to enhance trade relationships and market access between both nations. India’s approach reflects its commitment to fostering stronger economic ties while navigating the complexities of reciprocal tariffs.

Original Source: m.economictimes.com