India is facing new US tariffs as announced by Trump, with only weeks to respond. Trade Minister Piyush Goyal aims to initiate talks in Washington, discussing a potential Bilateral Trade Agreement. The Indian government is analyzing impacts on exports and formulating proposals for tariff reductions, while also confronting labor practices under scrutiny.
On April 2, India faces a new trade challenge as the US imposes tariffs, announced by Trump in a joint Congress address, citing higher levies imposed by India among others. With only a month to devise a response, Minister Piyush Goyal is headed to Washington to address complex trade issues and initiate discussions on a potential Bilateral Trade Agreement (BTA).
In February, India and the US agreed to negotiate a trade deal by year-end, aiming for $500 billion in annual trade by 2030 as set during Modi’s visit. Trump highlighted the unfairness in tariffs, stating that countries like India impose tariffs higher than those the US charges, such as auto tariffs exceeding 100%.
Observers note uncertainty as India awaits the US’s tariff moves but see potential for negotiation, especially with the trade deal in mind. The Indian commerce ministry has begun consultations to evaluate impacts and explore reductions in US tariffs while formulating proposals.
Experts suggest India might eliminate tariffs on many US industrial products, contingent upon reciprocal actions from the US, while agriculture could be excluded from these discussions. To prepare, India should propose this plan before the deadline unless objections arise from other nations that could invoke WTO regulations as a fallback.
Specific import items like motorcycles and certain fruits from the US currently face steep tariffs in India despite recent reductions. India’s average tariff on American goods stands at 7.7%, contrasting sharply with 2.8% on Indian exports, raising concerns about competitiveness in critical sectors subject to US pressure.
Experts express that the fallout from new tariffs hinges not only on existing tariff gaps but also on possible non-tariff barriers and local taxes. This situation raises fears about how punitive measures might skew India’s export landscape to the US market.
India is also evaluating the US Trafficking Victims Protection Reauthorization Act’s impact on exports while addressing the implications of anti-dumping duties. U.S. scrutiny regarding labor practices in sectors like textiles could lead to import restrictions unless India takes remediative steps against child labor use.
In summary, with the looming April 2 deadline, India seeks to navigate potential US tariffs through diplomatic discussions and strategic proposals. Addressing both tariff reductions and labor practices will be crucial for maintaining favorable trade relations. Continuous governmental support in export sectors will be essential as India adapts to the changing trade dynamics with its largest partner, the US.
Original Source: m.economictimes.com
