As the United States, under the leadership of Donald Trump, goes on a rampage with its tariff threats against its trade partners and economic and geopolitical rivals, India is likely to take a step in a different direction.
India To Cut Tariffs On US Goods
As per reports, India may cut tariffs on goods coming from the United States amid pressure from Uncle Sam.
Donald Trump has brandished the sword of tariffs to the BRICS nations, to which India is a party.
When Trump fervently opposed a potential ‘De-Dollarization’ and said that he would impose 100 per cent on the BRICS bloc, which also includes Russia and China, India changed its stance and said that it has no plans to switch from the US Dollar. The US Dollar is the world’s reserve currency.
US President Donald Trump | File Photo
What Are The Products Affected?
As per reports, India is set to review import tariffs on over 30 items.
These products range from luxury cars to solar cells and even footwear. This move, if brought to reality, could potentially lead to higher imports from the United States.
This move would fly in the face of the government’s posturing oriented in self-reliance or ‘Atmanirbharta’.
The products that come under this decision include luxury cars and other automobiles.
Luxury cars with a value exceeding Rs 35 lakh will attract a surcharge of 40 per cent, along with a reduced basic customs duty of 70 per cent.
This also comes at a time when India, which has a total trade of close to USD 120 billion with Donald Trump’s United States, runs a trade surplus of close to USD 40 billion with the North American nation.
| File/ Representative Image
Day-To-Day Items
Commodities like bicycles, footwear and the materials used to make them that come anywhere from Albuquerque to Albany may get cheaper.
In addition, other items under consideration include electronic toy parts; the items under review may also include smart electricity meters.
Manufacturing Items
Other sectors from the United States looking to increase imports to the most populous nation include the manufacturing and raw materials segment.
Laboratory-made chemicals will be cheaper, as they will now face a reduced basic customs duty or BCD. When it comes to marble, granite and slabs, although India produces a lot of these, products from the United States will also be available in the market, as India plans to cut rates on them as well.
Energy and Tech
As India looks to catch the advanced tech and AI train, which is dominated by the United States and China, the tariffs on semiconductor devices will lowered. In addition, when it comes to energy transition, solar cells, and modules may also get cheaper.
Other sectors from the United States looking to increase imports to the most populous nation include the manufacturing and raw materials segment.
| AFP PHOTO
Why Is It Happening?
Previously, apart from threatening US allies, namely Canada, the EU, the UK and Mexico with tariffs.
This also comes at a time when India, which has a total trade of close to USD 120 billion with Donald Trump’s United States, runs a trade surplus of close to USD 40 billion with the North American nation.
The trade deficit with nations is something that bothers Trump deeply, and it is arguably the biggest reason, at least according to his rhetoric, that the 47th US president has gone on a rampage with US’ trading partners around the globe.
