The U.S. plans to impose tariffs effective April 2, pushing India to rapidly devise a trade strategy. President Trump’s comments highlight the tariff burdens imposed on U.S. exports by various countries, including India. With an eye towards negotiating a Bilateral Trade Agreement, India’s government is consulting stakeholders to assess the impact of potential U.S. trade measures.
On April 2, the United States threatens to implement new tariffs, which could significantly impact India and its trade strategy. President Trump mentioned India alongside other nations during a congressional address, asserting that some countries impose higher tariffs on U.S. goods. India has now less than four weeks to formulate an action plan in response to these threats, with Commerce and Industry Minister Piyush Goyal visiting Washington to discuss these matters and initiate negotiations on a proposed Bilateral Trade Agreement.
In February, both the U.S. and India set an ambitious target to negotiate a trade deal by the end of the year, aiming for $500 billion in annual trade by 2030. Stakeholder consultations have begun in India to evaluate the potential effects of increased tariffs by the U.S. and examine opportunities for reducing Indian tariffs in industries of crucial importance. An inter-ministerial committee is studying the ramifications of these tariffs as discussions progress.
Experts suggest that the Indian government may consider eliminating tariffs on a range of American industrial products, contingent upon the U.S. reciprocating with similar policies for Indian exports, while deliberately excluding the agricultural sector from this proposal. Ajay Srivastava from the Global Trade Research Initiative emphasizes the need for India to present such offers proactively, before any U.S. tariff decisions are finalized to mitigate possible objections from other nations.
Currently, several U.S. products face high import duties in India despite recent tariff reductions, illustrating the significant disparity in tariff practices between the two countries. With India’s weighted average tariff on U.S. goods at 7.7%, compared to the 2.8% on Indian exports heading to the U.S., certain sectors face substantial challenges. Several representatives have indicated potential U.S. pressures on India to lower tariffs on highly taxed imports, thereby affecting India’s export competitiveness.
Further complicating trade relations, India is analyzing the implications of the U.S. Trafficking Victims Protection Reauthorization Act on its exports, given the concerns regarding child labor in its textile industry. The Indian government must act on this issue to avoid strict restrictions on imports, as the U.S. has called attention to labor practices in the country’s textile sector. Continuous support for export credit and technological advancement has been identified as critical for maintaining competitiveness amid evolving trade policies.
The U.S. tariffs set for implementation on April 2 might compel India to swiftly reassess its trade policies. As negotiations for a Bilateral Trade Agreement advance, India’s strategies may involve offering tariff reductions on select industrial goods while navigating the complexities of non-tariff barriers and human rights concerns. The challenge remains in balancing these negotiations to protect its critical export sectors and comply with international standards.
Original Source: m.economictimes.com
