Trump's Tariffs and India's Trade Triumph

The US's 27% tariffs challenge Indian exporters but are less daunting compared to competitors like Vietnam and China. India's favorable trade position could benefit from a Bilateral Trade Agreement with the US, aiming to double trade to USD 500 billion by 2030.

The recent announcement of 27% tariffs by the US under President Trump poses significant challenges to Indian exporters. Nevertheless, India finds itself in a relatively favorable position compared to its competitors such as Vietnam, China, and Indonesia, which face higher tariffs.

S C Ralhan, President of the Federation of Indian Export Organisations (FIEO), indicates that despite the tariffs, sectors like apparel, gems and jewellery, electronics, and others in India could see a diversion of exports, potentially mitigating some adverse impacts. The spotlight is now on the pending Bilateral Trade Agreement (BTA) with the US, which is viewed as a vital step to alleviate these tariff strains.

Negotiations between India and the US aim to finalize the first phase of the BTA by fall this year, targeting to more than double the bilateral trade to USD 500 billion by 2030. This comes in the wake of tariffs imposed by the US in a bid to reduce its trade deficit and bolster manufacturing. India's main exports include drug formulations, telecom instruments, and precious stones, while major imports from the US consist of crude oil and petroleum products.

(With inputs from agencies.)