Trump halts India-US trade talks amid unresolved Russian oil tariff tensions.
New US tariffs up to 50% impact key Indian export sectors significantly.
Sectors spared include smartphones, petroleum products, and pharmaceutical exports to the US.
India remains sole target of penalties for Russian imports, unlike China or Turkey.
US President Donald Trump has clarified that trade negotiations with India will be kept on hold until the ongoing tariff issue is resolved. This comes just two days after Trump doubled the tariffs on Indian imports for purchasing energy from Russia.
In response to a question on whether the trade talks between US and India will move forward, the US President flatly said, as per a Mint report, “No, not until we get it resolved,” thereby signaling a hard stance amid escalating trade tensions between the two countries.
On Wednesday, the White House hit India with yet another slew of tariffs, taking the tariffs levied on several sectors of the country’s economy to 50 per cent. This additional levy came just a week after Trump slapped 25% tariff on Indian exports to the US, affecting key sectors like smartphones, pharmaceuticals, auto parts and engineering goods and jewellery.
The new tariffs will come into force from 27 August onwards.
According to the US administration, national security and foreign policy are points of concern for India’s ongoing imports of Russian oil.
The White House order claims that these imports whether direct or via intermediaries, present an "unusual and extraordinary threat" to the United States and justify emergency economic measures.
According to a GTRI analysis, after the new tariff, organic chemicals' exports to the US will attract additional 54 per cent duty. The other sectors which will attract high duties include carpets (52.9 per cent), apparel - knitted (63.9 per cent), apparel - woven (60.3 per cent), textiles, made ups (59 per cent), diamonds, gold and products (52.1 per cent), machinery and mechanical appliances (51.3 per cent), furniture, bedding, mattresses (52.3 per cent).
However, among the sectors that have not been hit with any new tariffs from Trump are petroleum products, pharmaceuticals and smartphones.
The United States has imposed additional tariffs or penalty for Russian imports only on India. However, other buyers such as China and Turkey, have so far escaped such measures.
Currently, exporters are hoping an early finalisation of the India-US bilateral trade agreement, which might help them in dealing with the tariff challenges.
The two countries are negotiating a bilateral trade agreement (BTA) and are aiming to conclude the first phase of the pact by October-November this year.
