Impact of US Reciprocal Tariffs on India
The imposition of reciprocal tariffs by the US might have a limited impact on India. This is because the tariffs will target only specific sectors, potentially offering new opportunities for Indian exporters.
India's Position Compared to Other Countries
- India is relatively well-positioned compared to countries like Mexico, China, and Canada, which account for 50% of America’s total imports.
- NITI Aayog is conducting a highly disaggregated data analysis to ensure India doesn't lose out.
Historical Context and Benefits
- NITI Aayog member Arvind Virmani noted that after the US imposed tariffs in 2018, there was a decline in China's share of US imports.
- Countries like Taiwan, Vietnam, Thailand, Mexico, and India benefited from increased export opportunities.
Specific US Tariff Measures
- The US has imposed a 25% import duty on steel and aluminum products starting March 12.
- A 25% tariff on completely built vehicles (CBUs) and auto parts will take effect on April 3.
US-India Trade Negotiations
- US President Donald Trump plans to introduce reciprocal tariffs in April, citing high tariffs imposed by India on US goods.
- A US delegation, led by Assistant US Trade Representative Brendan Lynch, is in India to negotiate a bilateral trade agreement, aiming to conclude talks by Saturday.
- India and the US target to finalize the first phase of the trade agreement by autumn 2025 and aim to double bilateral trade to $500 billion by 2030, from over $190 billion currently.
