The ministry of commerce and industry has planned a review of the India-US trade relationship this week to assess its progress over the years and chalk out plans to deal with any possible execution of President-elect Donald Trump’s tariff threats.
Though “there are no irritants in the relations between the two countries that can lead to discriminatory tariffs against India,” an official said, the ministry will take a look at the experience during the previous Trump administration and plan for the future course.
Trump, who had called India an “abuser” of import tariffs during the US election campaign, on Sunday threatened the nine-member Brics bloc with 100% tariffs if the countries went ahead with their plan to create a new currency to rival the US dollar.
Despite Trump’s threats, ministry officials do not expect any drastic change in duties on US imports from India.
Commerce and industry minister Piyush Goyal also expressed similar views last week. “To the best of my understanding of the situation based on the Indian experience of working with the Trump administration we do not see any problem whatsoever,” Goyal had said, adding Prime Minister Narendra Modi and Trump enjoy a good relationship.
The officials said Trump’s tariff threats for Canada, Mexico and China made last week were tied to matters beyond trade such as illegal immigration and drug trade. While for Brics, the warning was aimed at desisting the bloc from undermining the role of the US dollar in international transactions.
“Between India and the US there are no security or other similar issues so action on that count is not expected,” one of the officials added.
The officials are hopeful that the India-US trade will continue its momentum of growth seen in the past nearly two-and-a-half decades.
Data compiled by the ministry since 2000 suggests that India’s share in US imports has steadily increased and this trend did not stop even when Trump was President between 2017 and 2021.
India’s share of US imports has grown to 2.8% in 2023 from 0.9% in 2001. During 2001-23, India’s exports to the US rose at the compounded annual growth rate of 10.48 % while during this period the US’s overall imports grew at 4.76 %.
Though Trump had called India an “abuser” of import tariffs, the US itself puts very high tariffs on farm products such as dairy (188%); fruits and vegetables (132%); coffee, tea, cocoa and spices (53%); cereals and food preparations (193%); oilseeds, fats and oils (164%); beverages and tobacco (150%); fish and fish products (35%); minerals and metals (187%); and chemicals (56%). If Trump’s tariff threats bring both sides to the negotiating table then India also has the room to seek concessions, according to experts.