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Trump’s reciprocal tariffs struck several countries on April 2, sending the markets into uncertainty. India’s trade deal talks with the US is underway, as per agreement between PM Modi and Trump.
India unlikely to retaliate against Trump’s tariffs (Reuters Image)
India does not plan to hit back at the US over the 26% reciprocal tariffs imposed on the country by President Donald Trump, a government official said, citing the ongoing trade deal talks between the two nations, news agency Reuters reported.
The government of India has found a clause of Trump’s tariff order that offers a possible reprieve for trading partners who “take significant steps to remedy non-reciprocal trade arrangements”, the official said.
According to this clause, the countries can be excused or get relief from the tariffs if they make efforts to fix unfair trade deals.
Another official, who did not want to be named, said that New Delhi sees itself to be in a better place than other Asian nations like China, Vietnam and Indonesia, who have been hit by higher Trump tariffs, as India is one of the first nations to have already initiated talks with Washington over a trade deal – something the country considers an advantage.
During PM Modi’s visit to the US in February, both nations agreed to finalise an early trade deal by autumn this year to resolve the issue of tariffs.
India has joined nations like Taiwan and Indonesia in ruling out retaliatory tariffs against the USA, however, others, such as the European Commission, are preparing to strike US items with extra duties following China’s retaliation.
This trade war has sent the markets across the globe into shock, with stock markets plunging in several nations, including in the US.
According to a Reuters report last month, India is open to slashing tariffs on US imports into the country, worth $23 billion.
PM Modi’s government has made several efforts to deal with the ongoing situation, such as cutting tariffs on expensive motorcycles and American bourbon and removing a digital services tax that had impacted big US tech companies.
According to economists, Trump’s tariffs could slow India’s economic growth by 20-40 basis points this financial year and strike a blow to the country’s diamond industry, which ships over one-third of its exports to the US, risking thousands of jobs in the Asian nation.