India Responds Cautiously to Trump’s Tariff Threat Amid Trade Deal Talks

India Responds Cautiously to Trump’s Tariff Threat: Giving a clear signals against the announcement of American President Donald Trump, about his reciprocal tariffs on its trading partners, India on Friday decided to deepen its trade relations with America, one way being tariff and non-tariff barrier reductions through a bilateral trade agreement. Trump announced on behalf of his administration these reciprocal tariffs coming into force from April 2 for all its partners and other nations charging higher levies on imports from the US as part of his "America First" policy.

Indeed, this announcement by the US president on tariff issues has caused speculations about a threat of altered conditions in global trade, as many countries have already resorted to counter-measures to this phenomenon.

In an initial response, New Delhi indicated that it looks forward to the amicable settlement of this dispute.

Also Read: China FM: India-China Ties Make Positive Strides, Boundary Issues Shouldn’t Overshadow Relations

During Prime Minister Narendra Modi's visit to the US in the last month, both sides announced plans to negotiate a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA)- External Affairs Ministry spokesperson Randhir Jaiswal said.

Commerce Minister Piyush Goyal was in the US and met his counterparts and the two governments are also working towards furthering discussions on a multi-sector bilateral trade pact, he added.

"Our objective through the BTA is to strengthen and deepen India-US two-way trade across the goods and services sector, increase market access, reduce tariff and non-tariff barriers, and deepen supply chain integration between the two countries," Jaiswal added.

In an instance of his recent attack, the US president talked about tariffs while addressing a joint session of the Congress and mentioned India along with the European Union, China, and Canada exploiting higher tariffs for the purpose on American products.

"Now, it's our turn," Trump said looking at how other nations have used tariffs against the U.S. for decades.

Modi had visited Trump on February 13 talks in Washington DC.

Both sides agreed to negotiate a mega trade deal by the end of the year and aimed for a target of USD 500 billion of annual trade by the year 2030 to narrow the trade deficit.

"Recognising that this level of ambition would require new, fair-trade terms, the leaders announced plans to negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA) by fall of 2025," a joint statement on Modi-Trump talks said.

In New Delhi, there is hope that it will be able to avoid reciprocal tariffs under which the Trump-headed administration would impose tariffs on February 2.

Trump from day of his assumption to the presidency, January 20 accusing India multiple times of levy-high tariffs and even describing it as a "tariff king" and "tariff abuser".

Also Read: India-US Trade Deal to Reduce Barriers and Boost Market Access: MEA

India has already made up its mind to lower tariffs on Bourbon whiskey, wines and Electronic Vehicle (EV) segments as per its Union budget for 2025-26.

This was interpreted as sending signals to the Trump administration that India's ready to lower tariffs over specific sectors.

It includes purchasing more oil from the United States, using American technological defence platforms to address the trade deficit of around USD 45 billion in India's favor.

In terms of overall trade in goods and services, the estimated annual business between India and the United States would be the largest and in fact, as much as USD 190 billion for 2023 calendar year.

Investments amounting to USD 4.99 billion recorded from the US accounted for almost Americanthird source in total FDI equity inflows into India during the financial year 2023-24.

Also Read: IAF Fighter Jet Crashes in Haryana’s Panchkula, Pilot Ejects Safely