The report highlights that the nation has been working to keep away from commerce disputes with the US. In its latest Union Finances, the federal government decreased import duties on a spread of merchandise, together with electronics, textiles, and high-end bikes.
Additionally Learn: India could also be one of many largest victims of Trump’s eye-for-eye tariff menace
Moreover, India has taken steps to strengthen diplomatic ties with the US, reminiscent of agreeing to repatriate over 100 unlawful Indian immigrants. Now, India is contemplating additional tariff reductions on luxurious autos, photo voltaic cells, and chemical compounds as a part of its technique to keep up easy commerce relations.
Nomura stated “India is contemplating lowering tariffs on over 30 objects and getting ready to extend purchases of US defence and power”.
The report additionally acknowledged that if India doesn’t cut back greater tariffs on American items, the US could reply with related duties on Indian exports.For instance, if India levies a 25 per cent tariff on US vehicles, Washington might impose an equal tariff on Indian autos. US President Donald Trump, who has criticized India’s commerce insurance policies prior to now, has pushed for “reciprocal tariffs” to make sure truthful therapy of US exports.The report identified that India has comparatively greater tariff charges in comparison with different nations, making it susceptible to US retaliatory measures. The US is India’s largest export vacation spot, accounting for roughly 18 per cent of its whole exports, which amounted to about 2.2 per cent of India’s GDP in FY24.
India’s commerce surplus with the US has been rising lately, reaching almost USD 38 billion in 2024. Key Indian exports to the US embody industrial equipment, gems and jewelry, prescription drugs, fuels, iron and metal, textiles, autos, and chemical compounds.
Trump has beforehand known as India the “tariff king” and has emphasised the necessity for India to purchase extra American-made safety gear. In latest discussions with Prime Minister Narendra Modi, he has pushed for a “truthful bilateral buying and selling relationship.”
To stop the imposition of upper reciprocal tariffs, the report acknowledged that India is exploring methods to succeed in an settlement with the US. Within the medium time period, the nation can also be trying to strengthen financial ties with Washington and entice extra American provide chains to arrange operations in India.
Prime Minister Narendra Modi assembly with President Trump on Friday in Washington is anticipated to debate tariffs and commerce.
