New Delhi, Imposing reciprocal tariffs is against global trade rules but one should take a “watch and wait” approach to newly elected US President Donald Trump's comments on imposing reciprocal tariffs, a senior official said on Wednesday .
Newly elected US President Donald Trump has said India is charging a lot of tariffs and reiterated his intention to impose reciprocal tariffs in retaliation for what New Delhi will impose on imports of certain US products.
Trump made the comments on Tuesday and also said that India and Brazil are among the countries imposing high tariffs on certain US products.
“It will be very difficult to decipher one or two sentences from Mr. Trump, but if I understand correctly from what he said. His main intention is that reciprocity will matter in the future. So if you tax Harley-Davidson, you will also impose a tax on motorcycle exports. So from that point of view this will be a clear violation of WTO standards, but there are cases where Mr Trump has used measures such as Section 232 of the Tariff Act, which allows the US to take measures. unilateral measures against countries for reasons of national security.
“So you will have to wait and see,” Director General of Foreign Trade Santosh Kumar Sarangi said at CII's export competitiveness event here.
He said there are many areas where India experiences tariff spikes, but the country does not necessarily export them to the US.
For example, India has high customs duties on some agricultural goods, but these are not necessarily exported to America.
“So if the US uses reciprocity and taxes it, it won't hurt us on a large scale, but there may be a few things where this reciprocity principle could affect us,” he said.
He further added, “So you have to wait and see how it plays out and the fine print of this won't be available until they go through a process, as if they have a process, as if they have a process where the USTR investigates, investigates and recommends an action. Before you can guess the impact, you have to wait and see what kind of products they are looking at.”
In 2019, Trump repeatedly claimed that India is a “tariff king” and imposes “hugely high” tariffs on American products. He has criticized India's “heavy tariffs” on US paper products and iconic Harley-Davidson motorcycles.
The US was India's largest trading partner in 2023-2024. India's exports stood at $77.51 billion while imports totaled $42.2 billion in the last fiscal.
In FY2024, India's largest exports to the US included medicines, apparel and ready-made items, cut and polished diamonds, smartphones, solar cells, shrimp, gold jewellery, auto parts, steel and steel items.
Reacting to Trump's comments, think tank GTRI said that while Indian tariffs comply with WTO rules, the proposed Trump tariffs would violate them.
“While Trump's claims about Indian tariffs may be exaggerated, India can use this moment to strategically review its tariff structure. India's average rate is 17 percent, significantly higher than the US's 3.3 percent but comparable to countries like South Korea and India. China,” said Ajay Srivastava, founder of the Global Trade Research Initiative.
He said if Trump continues with unilateral tariffs against India, he will violate US commitments at the WTO on tariffs.
In this case, India should be ready to respond decisively, he said.
When the US imposed tariffs on Indian steel and aluminum in 2018, India retaliated by raising tariffs on 29 specific US products. This well-calibrated response ensured that India collected equivalent revenues from US imports, demonstrating its ability to safeguard trade interests while maintaining a balanced approach.
“India must be prepared to meet potential challenges in the Trump era and not be caught off guard,” Srivastava said, adding that a targeted reduction in tariffs could be beneficial to India, in line with its aim to , stimulate value-added services. production and trade.
This article was generated from an automated feed from a news agency without any changes to the text.
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