US President Donald Trump's latest tariff policy has sparked fear among Indian exporters. With duties raised to 26% in addition to a baseline tariff of 10%, domestic sellers fear their foreign sales could be hit. However, a solution may be around the corner with Indian and US officials negotiating a trade deal before the tariffs come into force next week, suggest media reports.
Trump is "actively negotiating" trade deals with India, Vietnam, and Israel, CNN cited a senior adviser to the US President as saying.
The 10% base tariff will be effective from today while a flat 26% country-specific duty for India will come into force next Wednesday (April 9).
The Indian government has said it is "carefully examining" the implications of the tariffs announced by Trump on April 2, and that the Commerce Ministry is assessing the situation along with all stakeholders. Feedback is being taken from exporters and the department is also studying the opportunities that may arise due to the tariff changes.
Trump has billed the increased duties as "Liberation Day" tariffs that seek to stop foreign sellers from "ripping off" US industries.
The US President, who has repeatedly called India one of the "highest tariffing nations", used a mild tone while announcing the tariffs for New Delhi, calling Prime Minister Narendra Modi a "good friend" - pointing to their camaraderie that has continued since Trump's first presidency. But he recalled telling the Indian leader when he visited the US in February that New Delhi was "not treating us right".
The White House said Indian tariffs made it costly for American companies to sell their products in India - which, if removed, would increase US exports by at least $5.3 billion annually.
Experts fear the increased tariff would impact electronic exports worth nearly $14 billion and gems and jewellery exports worth $9 billion. Largely spared by the current tariff, auto components and aluminum exports would feel the brunt of the 25% duty announced earlier on these products.
The government, however, is trying to resolve it through dialogue with the Trump administration - with an eye on doubling bilateral trade to $500 billion by 2030, as was announced after PM Modi met Trump at the White House in February.
Indian and US teams are trying to expedite a multi-sectoral bilateral trade agreement that is mutually beneficial, India's commerce ministry said a day after the US President announced the tariffs. The trade deal will cover a range of issues of mutual interest that include deepening supply chain integration.
Indian officials are in touch with the Trump administration, the government said, adding that their talks are focused on increasing trade, investments, and technology transfers.
