While on the one hand, a group of Indian officials is talking to the US delegation to break the tariff of Trump. On the other hand, such a report has come out, in which concern has been expressed about Trump's impact on India. In fact, the fresh report of MK has come out. Two types of estimates have been made in this report. It has been said in the report that if the tariff is 10 percent, then India's exports have lost 6 billion dollars i.e. 51 thousand crores.
If 25 percent is seen in the tariff, then this loss can be seen up to Rs 2.65 lakh crore. According to MK's report, India can be one of the most affected countries because of this resipochle tariff. This is a large amount in view of the current exports of India, in which America is one of the largest trading partners in India. However, despite emerging challenges, there are subtle approaches and opportunities in areas which are most likely to be affected.
The MK report has divided India's leading export sectors in two cats. In which one category is more affected sectors and the other category is those who can benefit from this tariff. Disadvantages or affected sectors include dresses and gems/jewelery, which are ready to face the tariff. If the US proceeds with a broad country-level tariff, as is estimated, these industries will face huge losses. On the other hand, areas like auto parts, pharmaceuticals and electronics are better prepared from earlier fears.
In particular, it is going to have a great impact on the auto industry in India, as the US is going to impose 25 % tariff on cars completely assembled since April 3. Meanwhile, auto parts are also going to have similar tariffs till May 3, which is worrying because America is the largest export market in India. According to an ET report, the Center has started collecting data from the auto parts industry to assess the entire impact of these tariffs. The new fees will present a major challenge for the car parts of about 6.79 billion dollars to be exported by India to the US. The report states that industries are putting more clarity pressure on tariffs, especially in relation to which parts will be turned.
At the same time, India is also not sitting completely calm. In an attempt to reduce the impact of American tariffs, India has announced tariff cuts on several American imports, especially agri products. In a recent talks with the US, India has proposed to reduce tariffs on items such as almonds, cranberries and borbon whiskey. Ritters have stated that India is willing to offer tariff cuts on more than half of the US imports of more than 23 billion dollars, which is the biggest concession in the years.
In fact, according to the news agency, the internal analysis of the central government indicates that India's exports to the US 87 per cent, which are about $ 66 billion in total, may be affected by mutual tariffs. To prevent these disruption, India's offer is important, potentially reducing or abolishing tariffs on imported US goods ranging from 5 per cent to 30 per cent, which is more than $ 23 billion.
According to MK, India's position in the Global Value Chain, especially after Kovid, remains relatively smaller than China. However, America's tariffs on China and other countries including Mexico and Canada offer possible opportunities for India. Trade War has produced a void, especially in low skill products categories, which was earlier dominated by China.
According to MK's report, India has made slight progress in the high skill products value chain, but has not yet achieved an important part of the location vacated by China. The best opportunity for India is in gaining market share from countries like Mexico and Canada, which are with the US highly integrated supply chains.
In addition, India can adopt a more aggressive approach to dialogue, especially in energy and defense areas, where there are obvious opportunities to balance tariffs. Discussions can be used as part of the ongoing dialogue to reduce the tariff effects on more and more American defense components and energy resources to import tariff effects.
Even if the current focus is seen on tariffs. But India's distant thinking is something else. India's ambition is to increase the bilateral trade with the US from $ 190 billion to $ 500 billion by 2030. The two countries have targeted to complete the first phase of the trade agreement by the end of 2025, which aims to remove many trade obstacles and pave the way for better cooperation.
Despite the tariff, Pravakar Sahu of NITI Aayog has said that the scheme will have a minimum impact on India. He said that unlike Mexico, China and Canada, which is 50 percent of the US imports, India is in a better position. According to the MK report, despite the immediate effect being important, India will continue to develop a long term trade relationship with the US.
