India's tariff reduction decision was not influenced by Trump's pressure, but rather by existing trade agreements. The US aims to implement reciprocal tariffs, while India is safeguarding its economic interests.
Tariff: Following US President Donald Trump's announcement on April 2nd to impose reciprocal tariffs on several countries, including India, the issue has garnered significant attention. Trump claims India agreed to reduce tariffs under his pressure, but high-ranking sources within the Indian government have refuted this claim. Indian officials state the decision was not made under pressure, but rather in accordance with pre-existing bilateral trade agreements.
India has previously adjusted trade tariffs
India has reduced tariffs under trade agreements with countries besides the US, including Australia, the United Arab Emirates, Switzerland, and Norway. Similar negotiations are currently underway with the European Union and the UK. The US tariff reduction is considered part of this ongoing process, not a result of specific pressure from the Trump administration.
US demands and India's response
The US desires India to remove tariffs on nearly all goods, excluding agricultural products. If India complies, it would reduce its trade protection, benefiting American companies. However, India has clarified that it will prioritize its national interests in any trade agreement.
Modi-Trump talks and the direction of the trade agreement
Prime Minister Narendra Modi and Donald Trump have agreed to complete the first phase of a Bilateral Trade Agreement (BTA) by the end of this year. This agreement aims to increase bilateral trade to $500 billion by 2030. Both countries have also appointed senior representatives to reduce tariffs and other trade barriers.
What transpired in the India-US trade talks?
A delegation led by India's Commerce Minister Piyush Goyal recently visited the US for talks with American Commerce Secretary and trade representatives. The discussions focused on resolving trade disagreements between India and the US. Prior trade agreement negotiations had taken place, but without concrete results.
India's policymaker strategy regarding tariffs
Indian policymakers and businesses are strategizing to mitigate the impact of US tariffs. Reports suggest the government is considering tariff reductions on certain key US products. Meanwhile, Indian industries are maintaining contact with their US counterparts to ensure trade remains unaffected.
Trump's tariff policy and its impact
In his first address to the US Congress after becoming president, Donald Trump promised to impose tariffs on countries imposing unfair trade duties on the US. Trump argues that India, China, and South Korea impose high tariffs on US products, harming American companies. He stated that reciprocal tariffs would be implemented from April 2nd to ensure fair trade benefits for the US.
