US President Donald Trump has run his tariff weapon. India has been imposed 26 percent of tariffs, which is more than the tariffs imposed on European Union, Japan and South Korea. Some people even say that the tariff on India is more than 140 in the world. Now you can understand that the tariff imposed on India is not less in any case. Trump also put a tariff on India and said that he has good personal relations with Prime Minister Narendra Modi, but these relations have not affected his decision.
The Trump administration has imposed a 26% tariff on imports from India, which is 20% on the European Union, 24% of Japan and 25% for South Korea. China faced higher tariff rates than any major trading partner of America. Now he is facing at least 54 percent tariffs on many items. These tariffs are a setback for the Government of India as the Government of India had reduced many tariffs on US exports, so that the tariff of Trump can be tried. During Prime Minister Narendra Modi's visit to American in February, the two countries agreed to work towards a trade deal this year.
Trump said at an event held at the White House on Wednesday to announce the tariff that India is very strict. Very, very strict. The Prime Minister has just gone, and he is my very good friend. But I said, you are my friend, but you are not treating us properly. They charge 52 percent fees from us. According to Bloomberg's report, the pressure on New Delhi officials to trade with Washington is likely to increase due to the charges. Prior to the move, the Trump administration was indicating that one of the big tariffs of its tariff would be. The reason for this is also, India collects more tariffs in comparison to any major economy of the world. Trump has repeatedly criticized India's high tariff and has also called the country as Tariff King.
The White House said that the US tariff rates were the lowest before the reciperochl tariff, with a simple average tariff of 3.3 per cent compared to 17 per cent of India. In the last few weeks, India has changed its tariff system, which has reduced import duty on about 8,500 industrial goods, including major American items such as high-end motorcycles manufactured by Borbon whiskey and Harley-Davidson Inc., which has removed the prolonged complaint of the US President. India has also indicated its desire to buy more American oil, LNG and defense equipment to reduce its bilateral trade surplus. Officials have also indicated that the tariff will be further cut.
The fee will increase India to cut its tariff system further. Bloomberg News stated last week that as a part of the discussions, India is considering American demands to cut fees on US agricultural products. The officials were optimistic towards favorable results in view of these concessions. New Delhi may have to bow down to the American demand to eliminate non-tariff trade obstacles due to new charges, such as cases such as opaque import ban and licensing requirement on some imports are prominent.
Nigel Green, CEO of the Global Financial Advisor Devere Group, told Reuters that American charges have pushed India close to alternative trade blocks and strategic partners. He said that (from this) Indian exports will become less competitive and it will reduce the trust of investors. In the same way as India is trying to attract global capital running from China. However, the recent SBI Research report states that the impact of Trump's tariff is likely to be limited. Many global research and rating firms and banks such as Goldman Sachs, Nomura, Morgan Stanley and Fitch have also reiterated this feeling.
According to SBI report, the possible impact of American tariff on Indian exports will be modest. This has estimated a decrease of about 3 to 3.5 percent. The report indicated that India's strategic approach to the discovery of export diversified, alternative markets and the development of new trade routes from Europe to America will reduce the impacts of American tariffs. Goldman Sachs said in the note that America's gross export is the lowest among its emerging market colleagues. Fitch says that India's low dependence on external demand makes it 'somewhat untouched'.
Global economists believe that India will remain the fastest growing economy in the world. According to the IMF Economic Outlook of January, India will become the third largest economy in the world in the coming years. Based on the recent findings of Nomura, India is one of the most flexible economies in Asia in the current trade struggle. Director General of Federation of India Export Organization Ajay Sahai said that the recipe on India is lower than major competitors like Vietnam and Bangladesh, which can help the Indian apparel and footwear sector.
Exporters of Indian textiles, engineering goods, electronics and gems and jewelery sectors are expected to suffer the most due to tariffs. Banking and international share expert Ajay Bagga told ANI that these tariffs are based on exaggerated calculations, including real customs, alleged currency manipulation and GST. He described the change in American trade policy from "America First" to "America Alone". He said that Indian domestic sectors are safe from first level effects, but Indian textiles, engineering goods, electronics and gems and jewelery exporters are immediately affected. This morning, along with oil, selling was seen in metals. Large pharma companies are in weight and watch mode as regional tariffs will be imposed on them.
PM Modi, who was one of the first foreign leaders to meet Trump after his return to the Oval Office, recently praised the US President, and underline his close personal relations. After the meeting, the two countries agreed to complete the first phase of the trade deal by the end of this year and increase bilateral trade by $ 500 billion by 2030, which was $ 127 billion in 2023. From 2021-22 to 2023-24, America was India's largest trading partner. The US accounts for about 18 percent of India's total goods, 6.22 percent in imports and 10.73 percent in bilateral trade. Along with India, the US has a trade surplus of US $ 35.32 billion in goods in 2023–24 (difference between imports and exports). It was US $ 27.7 billion in 2022-23, US $ 32.85 billion in 2021-22, $ 22.73 billion in 2020-21 and $ 17.26 billion in 2019-20.
