Talking to US-based Breitbart News Mr. Trump said that though he maintains a good relationship with India, he has problems with the high tariff rates of the exports from India. “I have a very good relationship with India, but the only problem I have with India is they’re one of the highest tariffing nations in the world. I believe they’re probably going to be lowering those tariffs substantially, but on April 2, we will be charging them the same tariffs they charge us”.
This move if implemented will have severe impacts on India’s agriculture and pharmaceutical exports to the US. Union Commerce Secretary Sunil Barthwal said that negotiations with the US are ongoing as they plan to sort out the issues on trade and tariffs by the end of this year through a bilateral trade agreement but the current actions of the United States are going against India’s favors.
The high tariff of 25 percent imposed on steel and aluminum is already pressuring these industries, and experts point out that over $5 billion amount of goods in the sector has been impacted by Trump’s tariffs.
In the meeting between PM Narendra Modi and President Trump last month both parties agreed to bilaterally solve the tariff issues and India already reduced it on certain items like bourbon whiskeys and motorbikes where the US has a large share. Compared to the states India has a higher tariff especially in the agriculture sector to a simple average of 39 percent, and the same goes for the pharma sector which will be equally impacted by tariff barriers.
Goldman Sachs reported that tariff measures may harm the country on a national level and create multiple trade complexities between the nations. Previously US has also called India the “tariff king,” and “big abuser”, but considering the geopolitical situations it would be beneficial for both countries to bilaterally solve the problem rather than reciprocating tariffs.
