Former Foreign Secretary Harsh Vardhan Shringla stated that the b friendship between Modi and Trump could provide India relief from US tariffs. Alternative markets and technology investments will bring trade benefits and increase FTA possibilities.
New Delhi: The prospects for a Free Trade Agreement (FTA) between India and the United States have been rekindled. Former Foreign Secretary Harsh Vardhan Shringla stated that the deep and trustworthy relationship between Prime Minister Narendra Modi and US President Donald Trump is a positive step in this direction. He explained that this friendship could enable both countries to overcome tariff and trade disputes and reach a quick and beneficial agreement. The US has imposed tariffs of up to 50 percent on several major products imported from India, but Shringla believes that this friendship will help both countries overcome this challenge.
Impact of US Tariffs on India
The 50 percent tariffs imposed by the United States could significantly impact India's exports. According to data from the Global Trade Research Initiative (GTRI), these tariffs will apply to $60.2 billion worth of products out of India's total exports of $86.5 billion. This could lead to a 70 percent reduction in exports in labor-intensive sectors such as textiles, gems and jewelry, and marine products. However, sectors like pharmaceuticals, Active Pharmaceutical Ingredients (APIs), and electronics will not be affected by these tariffs. India is exploring alternative markets to mitigate this impact.
Alternative Markets and Global Trade Strategy
India has already entered into Free Trade Agreements with Australia, the UAE, and the UK, and an agreement with the European Union (EU) is also a possibility. Through these, India can redirect its exports and reduce the losses caused by US tariffs. Shringla stated that India is not only increasing partnerships with the US in traditional trade but also in technological sectors such as semiconductors and Rare Earth Minerals. This move will strengthen India's global economic power in the coming years.
Reliance on Strong India-US Relations
Shringla says that the relationship between India and the United States is strengthened not only by trade relations but also by shared values and democratic principles. This foundation helps to overcome any disputes or conflicts. The appointment of Sergio Gohr as the new US Ambassador to India is also an indication of further strengthening this relationship. India is working towards ensuring economic and trade benefits in the future through its strategies and partnerships.
Technology and Future Investments
India is now rapidly working in sectors such as semiconductors, Rare Earth Minerals, and high-tech manufacturing, rather than relying on traditional exports. Shringla says that these sectors will play an important role in India's economic progress in the next 20 years. Partnerships with countries like the US can strengthen India's global competitiveness in these sectors and further improve its exports through new technological achievements.
