“This is a tool and a method for the US, which is the largest consuming country in the world, to get a fairer deal from all others. And they’ve been very plain about it,” Munjal told on the sidelines of the Carnegie Global Tech Summit in the national capital.
Speaking on the pause on tariffs for countries that have engaged in negotiations with the US, Munjal said the temporary rollback was more tactical to give themselves time to actually get to better agreements with many of the countries which are in conversation with them, including India.
“There are active dialogues going on…So I think in the long run, this will probably help India more than many other countries,” Munjal said.
“Even if you do a comparative of the tariffs, the tariff announced for India was lower than many of the countries in the region, many of the countries who are similar to ours in terms of what their product mix is for exports,” added Munjal.
As Donald Trump announced pause on tariffs for 90 days for trade negotiations, India should avoid signing a comprehensive Free Trade Agreement (FTA) with the United States, as it may require India to make harmful trade-offs, suggested Global Trade Research Initiative (GTRI).Instead, GTRI said, India should consider a limited “Zero-to-Zero” tariff deal on 90 per cent of industrial goods, a model already offered by Europe to the U.S.It said, “Avoid a comprehensive FTA with the US as it would force India to make damaging concessions. It’s a deal that would cost India more than it gains. Restrict to Zero for zero deal on 90 per cent industrial Goods. Europe has offered similar deal to the US.”
The report warned that a full FTA with the US could turn out to be a costly mistake. It highlights several demands by Washington that could hurt India’s key sectors.
Why India should be cautious
The Trump tariffs without the pause were likely to hurt the Indian economy by 20-50 basis points, with Asia’s third largest nation could lose around $31 billion, according to the Emkay report. With a cooldown period, India will have a chance to further continue its bilateral talks with the US counterparts for relief.
Among the most vulnerable sectors are apparel and gems/jewellery, which are exposed to the full brunt of the tariffs.
In an attempt to mitigate the impact of US tariffs, India has reportedly offered tariff cuts on a range of US imports, particularly agricultural products. In recent negotiations with the US, India has proposed reducing tariffs on items like almonds, cranberries, and bourbon whiskey—key US exports that have been identified as part of the broader trade talks. Reuters has reported that India is willing to offer tariff cuts on more than half of US imports worth $23 billion, marking the biggest concession in years.
While the immediate focus is on the implementation of tariffs, the broader picture remains India’s ambition to double bilateral trade with the US to $500 billion by 2030 from the current $190 billion.
Content Source: economictimes.indiatimes.com