Recently, the United States imposed a 25 percent tariff on exports of several Indian products. This decision has caused a stir in both the Indian government and the business community. The central government is deeply contemplating its next strategy. Commerce Minister Piyush Goyal informed Parliament that the government is reviewing the situation in consultation with exporters and industry groups, and is trying to understand its widespread impact.
Preparing to Increase Imports of American Goods
According to government sources, India is now planning to increase the import of certain goods from the United States in order to reduce the trade surplus. This primarily includes natural gas, communication equipment, and gold. The import of these goods may be gradually increased over the next three to four years. This step is considered to be in the direction of balancing trade with the United States.
Not F-35s, but Emphasis Now on Joint Manufacturing
The Indian government has made it clear that it will not buy expensive fighter jets like the F-35 from the United States. Instead, the government's focus is on joint design and manufacturing in the defense sector. This means that India now wants to manufacture defense equipment here in collaboration with American defense companies. This will not only bring technology to India but also strengthen the domestic defense industry.
India Will Not Take Any Retaliatory Action Yet
According to a Bloomberg report, India will not currently respond directly to this tariff action by the United States. However, the government has reserved the right to take action in the WTO (World Trade Organization) against the US for increasing duties on steel and automobiles. This means that when needed, India will exercise its right.
US Objects to India's Purchase of Russian Oil and Weapons
The Trump administration is most concerned about India buying oil and weapons from Russia. The United States has repeatedly warned India to distance itself from Russia. But India believes that its strategic needs and energy security interests are paramount. India is buying crude oil from Russia at very cheap rates, which is keeping the prices of petrol and diesel under control in the domestic market.
America's Eye on Trade Surplus
According to an IMF report, the trade deficit between the US and India was about $43 billion in 2023. This is 11th on the list of America's total trade deficits. However, the deficit with Vietnam has reached $121 billion. Despite this, the Trump government is targeting India because the United States wants India to buy more of its products.
Impact of Tariffs on Indian Industry
Indian exporter organizations say that the new tariff imposed by the United States will have a heavy impact on their business. In particular, the demand for steel, textiles, and some technology-based products will be directly affected. Many companies have already complained about a decrease in their orders in the United States.
A New Test of Relations Between the Two Countries
Trade and strategic relations between India and the United States have been strengthening for decades. But recent events indicate that cracks are now appearing in these relationships. While India has focused on self-reliance and technological partnerships, the United States wants India to be a large customer for its markets. In such a situation, it will be interesting to see how the two countries resolve this tension.
