India has decided to take US President Donald Trump’s reciprocal tariff plans head-on. The government is preparing its own list of sectoral tariff and non-tariff barriers faced by Indian exporters to the US that it could flag on a reciprocal basis in the negotiations for the proposed bilateral trade agreement (BTA) with Washington DC, sources have said.
“The government has sought fresh inputs from various industry and export bodies on issues faced in their trade with the US. Information has been sought on tariff barriers and also on non-tariff or regulatory barriers. A strict timeline of less than a week has been given as negotiations may begin soon,” an official tracking the matter told businessline.
Trump signed an order on February 13 for a `fair and reciprocal plan’ of imposing tariffs on trade partners that will seek to correct “longstanding imbalances” in international trade.
He was scathing on India, pointing out that the country’s tariffs were very high, 70 per cent on many goods, and in some cases far more.
The executive order was signed just before Trump’s meeting with Prime Minister Narendra Modi where the two decided to set a target of doubling bilateral trade to $500 billion by 2030 and work on a bilateral trade agreement (BTA) with a year-end deadline for the first tranche..
While Trump, said that its trade deficit with India was at $100 billion, government figures show that it is actually less than half of it. In FY24, India’s merchandise trade surplus with the US was a little over $35 billion while inclusion of services pushed up the surplus slightly more.
While Trump indicated that the US-India BTA would serve to address the “long-running disparities” in the trading relationship, however, India wants to use the opportunity to sort out its own sets of issues, the source said. These include high tariffs in some items and prohibitive standards for certain agricultural and industrial products and long processing time for business visas. .
“As India has already lowered import duties on items of interest to the US such as bourbon whisky, motorcycles, ICT products and metals and is ready to buy more oil & gas and defence equipment from the country, it wants to also make some gains through the BTA,” the source said.
The government will compile what the industry suggests and take it forward in the negotiations with the US government,” the source added.
India’s top exports to the US include engineering goods, electronics, gems and jewellery, drug formulations and biologicals, petroleum products and ready-made garments.
