Delhi’s Optimistic Breakthrough: Anticipating Life-Changing Tariff Relief in US Trade Agreement
As India and the US prepare to negotiate a bilateral trade agreement (BTA), New Delhi seeks concessions on the US’s recent tariffs, including a 25% tariff on steel and aluminum. These discussions are expected to take place in a trade forum where both nations aim to reach a $500 billion trade target by 2030. India awaits clarity on the US’s reciprocal tariffs, which could affect its exports, as details are anticipated from the US Commerce Secretary by April 1. The United States Trade Representative (USTR) confirmation is still pending, delaying further clarity.
Previously, during Trump’s first term, India retaliated against similar tariffs; however, this time, the US cites exploitation of tariff exemptions by countries like China as a reason for broadly ruling out concessions. Despite this, President Trump expressed potential consideration for exempting Australian steel and aluminum imports.
Indian steel producers face challenges with the added US tariffs, as noted by Moody’s Ratings, but India remains lower on the US’s priority list for trade deficit adjustments, which more heavily involve China, Mexico, and Canada. Despite this, India’s tariffs on certain agricultural products and motorcycles remain significantly higher than those the US imposes on Indian goods.
Some US tariffs could unintentionally benefit India through trade diversion opportunities, particularly as India’s electronics exports have surged, partly due to US tariffs during Trump’s first term. This accelerated India’s share in US electronics imports, highlighting the country’s potential for growth as a high-tech exporter. India’s overall goods trade surplus with the US has doubled post-pandemic, with significant growth in electronic and engineering goods exports, suggesting a shift in India’s export dynamics.
Original Source: https://indianexpress.com/article/business/delhi-hopes-for-some-tariff-easing-as-it-works-on-us-trade-agreement-9841572/
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Publish Date: 2025-02-18 04:20:00
