Amid an anticipated trade war from the United States President Donald Trump, Bloomberg reported that India is evaluating various options including a trade deal, cutting tariffs and importing more goods from the US. Out of various options, the government could think of buying more whiskey, steel and oil from the US.
The government has considered various scenarios to counter any steps a new Trump administration may take to narrow India’s trade surplus with the US which was $35.3bn for the year ended March 31, sources told Bloomberg.
It was informed that India could also reduce some import tariffs, with officials drawing up a list of likely products, such as bourbon whiskey and farm goods like pecan nuts. Furthermore, one of the proposals also taking reducing duties on goods imported from US states that are politically important for the Republican party into consideration.
According to the report, the plans are part of India’s bigger strategy to avoid any potential confrontation with Trump and also benefit from any potential US-China trade war.
The report said, India may consider increasing its purchases of goods from the US in sectors such as soybean, dairy, vehicles, medical instruments, and aircraft. If the US imposes higher tariffs on China and restricts its access to advanced technology, sectors like electronics, high-tech machinery, textiles, footwear, and chemicals in India could see significant benefits. However, the new Trump administration is expected to press India on issues such as data regulations, intellectual property rights, and e-commerce policies.
Additionally, across-the-board tariffs of 10–20% on all countries could provide a boost to India’s exports, particularly in auto components and metals.
Trump's Trade War
Trump, who took oath as the 47th President of the US on Monday, warned that he would impose 100% tariff on Brics nations, which includes India, if they are not ready to balance trade with the United States reciprocally or take any steps to replace the US dollar.
However, external affairs minister S. Jaishankar in December said that India had never considered de-dollarisation and there was no proposal to have a BRICS currency either.
