India Treads Middle Path Amid New US Tariff Landscape

India maintains a balanced stance amid recent US tariff changes, but potential hikes under Section 122 may pose challenges. While countries with US trade deals face short-term setbacks, lack of comprehensive agreements could favor others. Currency markets remain unsettled as US trade policy uncertainty persists.

Amid the latest tariff shifts instigated by the United States, India maintains a middle-ground stance, as reported by Union Bank of India. The study suggests that definitive tariff hikes under Section 122 might endanger its current tariff advantages secured through prior negotiations.

Countries that have negotiated bilateral trade agreements with the US now face potential short-term disadvantages, while those without comprehensive deals could potentially fare better in the current commercial climate, the report suggests. Despite being from a low-tariffed group among its Asian peers, India could face increased exposure if tariffs rise uniformly.

Following a Supreme Court decision that nullified many of the tariffs imposed during the Trump era, a renewed push for tariffs under Section 122 is underway. President Trump has signaled an initial 10% tariff on all imports, with plans to raise it to 15% for a temporary period of 150 days, influencing global financial markets.

(With inputs from agencies.)