The Union Cabinet is reportedly expected to hold a crucial meeting as US President Donald Trump's massive 26 percent tariffs on India came into effect on Wednesday. During April 2 Liberation Day rollouts, Trump imposed massive tariffs on 60 countries.
Trump's tariff spree stemmed from the argument that nations across the world bring imbalance in trade by imposing unfair levies on US exports while enjoying preferential access to the American market.
Earlier, Trump called India a "big abuser" of trade ties while adding, "India is a very high-tariff nation. They charge us a lot." However, recently, on a change of tone, Trump asserted that the trade tariff talks were "working out very well between India and the US" while calling PM Narendra Modi a "very smart man" and a "great friend" of his.
Impact On Indian Market
According to the experts, one advantage for India is that semiconductors, copper and pharmaceuticals have been exempt from the US tariffs.
However, exports in key sectors like auto parts, gems and jewellery will take a hit. Sources said the government was in touch with exporters to minimize the impact of tariffs.
India's Reaction To US Tariff
So far, the BJP-led Centre has followed a cautious approach to the US tariff hike issue.
According to the experts, India is unlikely to impose counter-tariffs on the US. Instead, the government is actively working on the US-India trade deal that was announced during Prime Minister Narendra Modi's US visit earlier this year.
Recently, the two nations agreed to the terms of reference for the Bilateral Trade Agreement (BTA).
External Affairs Minister S Jaishankar and US Secretary of State Marco Rubio on Monday agreed on the importance of early conclusion of the Bilateral Trade Agreement.
Taking to social media, Jaishankar said the two officials exchanged perspectives on the Indo-Pacific, the Indian Sub-continent, Europe, Middle East/West Asia and the Caribbean.
“Good to speak with @SecRubio today. Exchanged perspectives on the Indo-Pacific, the Indian Sub-continent, Europe, Middle East/West Asia and the Caribbean. Agreed on the importance of the early conclusion of the Bilateral Trade Agreement. Look forward to remaining in touch,” Jaishankar said.
India has already lowered tariffs on US bourbon whisky and Harley-Davidson motorbikes. It has also dropped a tax on digital services, known as 'Google Tax', that affected US tech giants in an attempt to win over Trump.
