According to the mutual tariff policy of Trump, it will probably start on April 2, India must be ready for its response. Should it be a response to a possible victorious game for both countries? Recently, US Minister of Foreign Affairs Hayard Lutnik said that India should leave the existing model and markets, as both countries work for a large trade transaction. Last month, the Trump Modi meeting planned Mission 500 – target bilateral trade until 2033, about $ 200 billion in 2023. In our opinion, this gives an opportunity for the advantaged game, provided that we play our cards cleverly and not take revenge. The next trip to the Minister of Commercialart Piush Gouali in the United States will decide on how we manage to cooperate and undergraduate our strategy.
President Donald Trump It seems that it is decided to restore the global trade with its mutual tariff policy. There is no doubt that the largest US trade partners have enjoyed low imports in the United States while exporting their products, while they have kept their importance responsibilities. The policy of Trump’s “mutual tariffs” policy is a simple logic. The tariff for American goods will lead to revenge. Trump expects that this policy will only bring billions of dollars to tariff income, but also significantly reduces the US trade deficit.
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There is no shame to admit that India has been almost a “tariff king” because Trump has beaten many times. India tariffs have repeatedly forced by the United States. According to the WHO, India defines tariffs that are 5.2 times higher than the United States has been charged with Indian goods. Deficiency is available to other major trading partners, as well as Canada (1.2 times), Mexico (1.5 times) and China (2.3 times). The imbalance is even worse for agricultural products. India’s agricultural tariffs are 7.8 times higher than the United States forces the exports of Indian farm. Canada (2.96 times), Mexico (2.38 times), EU (2.16 times), and China (2.8 times) also significantly appreciate agricultural tariffs. Not surprisingly, victory is outraged by this unequal treatment of US goods in the world trade system.
The US trade deficit (in goods and services) hit $ 918.4 billion in 2024, this is a great concern for Trump. The trade deficit of goods is only $ 1,211.7 billion, partly reimbursed from the services of $ 293.3 billion in trade. China continues to be the largest driver of this deficit, which is $ 295.4 billion, followed by the EU, Mexico, Vietnam and Canada (see graphics). India, although a smaller player, took the 10th place, which is only $ 45.7 billion in the US trade deficit (according to USBE data for 2024). But even more shocks, the pace of America’s trade deficit has grown up with certain countries. From 2020 to 2024, the US deficit with Canada increased by 239.4%, followed by South Korea (161%) in Taiwan (147.1%). This is an IRKED and worried about.
India stakes are high. The United States is India’s largest trading partner. How can India fit the interests of the United States without folding the ship? This is the Crux of any negotiation.
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Energy and protection are two big tickets to accommodate our interests. India imported $ 39.2 billion worth of oil oil (Faculty of Trade, Goi) in FY23-24. Russia was 34.6 percent, and Iraq 20.7 percent, Saudi Arabia 16.8 percent and 4 percent of US. India can easily add its energy purchases from the United States. If necessary, you need to raise some of the high-tech defensive purchases, such as F-35 fighter jets. This can easily balance the US trade deficit with India. From India’s point of view, the US-China’s trade war will create new opportunities for India, especially in intensive work products, including toys, textiles and leather items.
But India should start identifying products where tariff cuts will have minimal internal influence and access to us. Part of the highest duty is on alcoholic beverages and tobacco products: whiskey, vodka, rum, shining wine and cigars, which have 150%. Similarly, cars and EVs are taxed to 125 percent, and little agricultural products such as nuts, honey, coffee, green tea and sugar between 50-100%. It makes sense to keep those tariffs so high. In some sensitive cases, yes. But they are too big among others. In our opinion, all overly high tariffs must be made by a maximum of 50%. If these industries cannot survive even with the protection of 50% tariff, it is not necessary to protect them.
Negotiations will be the workload in agriculture, taking into account its sensitivity to India. In terms of the United States, its highest agricultural exports includes soy ($ 27.9 billion), cotton ($ 6 billion), on which India defines 45 percent, and 5% is 30 percent. A huge 150% tariff is set for the preparation of food, another major US export point ($ 5.7 billion). Depending on the milk powder (SMP) captures 60% duty. The best way for India will negotiate tariff interest rates and have some access to US products.
In response, India could have a larger market access to a large amount of product, including pomegranate, grapes, mango, banana, indian snacks and food preparations. Onus is taking place in India to build effective export lines for the United States, taking care of their sanitary and phytosanitary standards. India must make this homework to framed victorious strategy.
Gulat is a special professor, Rao is a senior friend, and the West is an Iriier research assistant. Views are personal
