As the US president-elect Donald Trump’s statements on import tariffs spark jitters, India feels that it would be spared any serious adverse action on its exports due to a close relationship both countries enjoy and the current tariff levels maintained by India.
“We need not jump the gun. Let the new government (in the US) take charge and express its formal views. To the best of my understanding of the situation based on the Indian experience of working with the (previous) Trump administration, we do not see any problem whatsoever,” commerce and industry minister Piyush Goyal told reporters here.
During the election campaign Trump had said that he will be raising import duties to 20% across the board and putting a 60% duty on Chinese imports. On some products like electric vehicles he has talked of 100% duties to level tariffs with trade partners of the US. He also singled out India in campaign speeches saying that among the major economies it imposes highest tariffs on goods
Earlier this week he announced an across the board tariff of 25% on Canada and Mexico and 10% on China which will be imposed after he assumed office in January. Action against Mexico and Canada has been announced as retaliation for failing to illegal immigration and drug smuggling through their borders. China has been singled out for not controlling the flow of illegal drugs into the US.
Goyal said Trump and Prime Minister Narendra Modi enjoy a good relationship and “this friendship will continue to blossom and grow further as is evident from various comments made by him (Trump) so far.”
“The Prime Minister has managed India’s international relationships better than ever in the past. He has worked with three administrations in the US – Obama, Trump and Biden. We will again work with the Trump administration. In the past 10 years our relationship with the US got better and better every single year,”the minister said.
According to the data India’s share of US imports has grown to 2.8% in 2023 from 0.9% in 2001. During 2001-23, at a compounded annual growth rate (CAGR), India’s exports to America rose by 10.48%. In this period, the US imports from the world has grown at 4.76%.
The US is India’s biggest trading partner with bilateral merchandise trade in 2023-24 of $ 119 billion. India’s exports were $ 77.5 billion and imports $ 42.1 billionAdded to the goods trade is the massive services trade between the two countries. Services exports to the US were about $ 36.3 billion in 2023 and imports were $ 25.9 billion and rising.
India-UK FTA
Goyal said that talks on the proposed Free Trade Agreement with the UK will be taken forward after the budget session. “There has been a change in government in the UK. I am in touch with my counterpart in the UK. I feel they would have taken a briefing and debriefing after which they have given a signal that they are willing to move ahead with further negotiations. After the Parliament session we will take this forward.”
Earlier this month Prime Ministers of UK and India had met in Brazil on the sidelines of the G-20 Summit where it was announced that negotiations on the FTA will resume next year.
EU’s carbon tax
Goyal said that in his meeting on trade related matters with Minister of Delegate of France for Foreign Trade Sophie Primas on Wednesday he also expressed India’s deep disappointment with deforestation regulations and many other regulations that the EU has come out with which are not acceptable to anyone in the world.
“This issue will be settled within the EU and we do hope that our engagement with individual countries of the EU and India’s strong articulation of its views will resound through them in the EU also,” he said.
Fresh sops for exports
The minister also said that the government is open to any initiative or proposal which might come within the framework of international best practices and World Trade Organisation rules to support India’s exports.