India-US Trade Deal: A Pathway to Resolve Trump-Era Tariff Concerns

A potential trade deal between India and the US may ease tariffs imposed during Trump's presidency. While initial tariffs have had limited direct impact, there is concern for key Indian exports. India is actively seeking solutions, including reducing tariffs and exploring new trade strategies.

The possibility of an India-US trade deal could alleviate the impact of tariffs introduced under President Donald Trump, finds a report by Nirmal Bang Equities. The report underscores that India's government is addressing pressures from these tariffs which have extended to global trade.

President Trump has hinted at imposing reciprocal tariffs on India, with crucial decisions pending. While existing US tariffs on steel and aluminum have minimal direct impact on India—composing less than two percent of its exports—the risk looms for broader tariff applications on significant Indian exports such as electronics, automobiles, and textiles.

The scenario could potentially affect 30% of India's merchandise exports to the US, per the report. Despite challenges, India remains proactive, reducing tariffs on goods like motorcycles and alcoholic beverages, and is initiating strategic defense and oil purchases from the US to reinforce bilateral trade relations. Until a deal crystallizes, India is focusing on mitigating disruptions.

(With inputs from agencies.)