Trump tariffs: The Indian government is reportedly exploring a plan to negotiate the suspension of the 26 per cent tariffs on Indian goods till a Bilateral Trade Agreement between the countries is finalised. The BTA is expected to be finalised by fall of 2025. Meanwhile, Secretary of State Marco Rubio and External Affairs Minister S Jaishankar discussed reciprocal tariffs as well as the importance of concluding the BTA early.
According to a report in Mint, India is preparing to increase both official and backchannel talks with the US. It quoted a source, who said the government is exploring all possible avenues to mitigate potential losses to the country’s exports.
“India does have an added advantage, as it is the only country that has been offered the opportunity to pursue a bilateral trade agreement with the US,” said a source to the financial daily.
India could also negotiate a temporary relief for a select list of high-performing export categories, including textiles, engineering goods and electronics goods.
TRUMP TARIFFS IMPACT
India has positioned its exporters advantageously compared to competitors facing higher import duties in America, sources told news agency PTI. They also highlighted that sectors like marine need to explore new markets such as the European Union to boost shipments.
India has consistently protected its dairy sector in all free trade agreements and plans to continue these safeguards. Sources noted that any US imposition of higher tariffs on pharmaceuticals would have a minimal impact on India. “India has emerged as a winner in the reciprocal tariffs imposed by the US. India has the first mover advantage as it is negotiating a bilateral trade agreement with America,” a source remarked.
In a trade agreement, two countries typically reduce or eliminate import duties on most traded goods. In this scenario, both nations might consider cutting taxes for each other. While the US has imposed an additional 26 per cent import duty on India, competitors like Vietnam face 46 per cent, Bangladesh 37 per cent, China 34 per cent, Indonesia 32 per cent, and Thailand 36 per cent.
Reports indicate that US President Donald Trump plans to announce tariffs on pharmaceuticals and semiconductors soon, with unprecedented measures on pharmaceutical imports. However, the US has exempted these sectors among a few others from duties in earlier announcements. The commerce ministry is in dialogue with exporters to address concerns, as many believe their sectors won’t be significantly impacted due to higher duties on competitors.
