Navigating the Trade Tariff Tangle: US-India Edition

NITI Aayog member Arvind Virmani has addressed the limited impact of US reciprocal tariffs on India, suggesting that the upcoming USA-India Bilateral Trade Agreement could mitigate potential drawbacks. The tariffs will take effect from April 9, with minor adjustments in percentage factors, targeting trade imbalances.

On Friday, NITI Aayog member Arvind Virmani highlighted the limited impact of US reciprocal tariffs on India's economy due to its low foreign trade dependency. He suggested that the proposed USA-India Bilateral Trade Agreement could minimize negative effects in the medium term.

In the long term, Virmani expects the final agreement to enhance gains over the next decade. The US recently announced a 26% tariff on Indian imports, citing high duties on American goods imposed by New Delhi.

Virmani further explained that the new tariffs would have varying effects based on the competitive landscape and commodity categories, with potential deflationary impacts globally. Despite uncertainties, this scenario could offer opportunities for strengthened US-India supply chains.

(With inputs from agencies.)