The government’s stance on the tariff threats posed by the United States is shaped by several considerations. Key among these is the observation that no specific measures have been enacted against India thus far, coupled with the US administration’s willingness to engage in negotiations regarding the Bilateral Trade Agreement (BTA) being discussed between the two nations.
Commerce Secretary Sunil Bartwal outlined this viewpoint during a meeting with the Parliamentary Standing Committee on External Affairs. He pointed out that, as of now, the US has not imposed any targeted tariffs on India.
Additionally, India’s situation is distinct from that of Canada, Mexico, or China, which have been subjected to specific measures from the US. Despite comments from US President Donald Trump suggesting that India has agreed to lower its tariffs, no formal agreements or commitments have been established between the two countries.
In response to inquiries from committee members, particularly those from the Opposition, regarding US Commerce Secretary Howard Lutnick’s claims that India has consented to a broad agreement encompassing agriculture, Bartwal reiterated that India has not made any commitments.
Moreover, discussions on the BTA are ongoing, and India has until September to finalize specific terms with the US. The Indian government is hopeful that a uniform tariff will be applied to all countries that have a trade surplus with the US, functioning as reciprocal tariffs. However, Trump has indicated a preference for tariffs that are country-specific. “Whatever tariffs they impose on us, we will reciprocate. If they tax us, we will tax them. Should they enforce non-monetary tariffs to restrict our access to their market, we will respond with non-monetary barriers in kind,” he stated during a recent Congressional address.
Addressing the pressure from the US, the Commerce Secretary emphasized that India has not made any concessions and will respond only once a formal agreement is reached. While Opposition members expressed dissatisfaction with his explanations, BJP representatives argued that political divisions should not interfere with the negotiation process.
A member highlighted, “How can India respond to mere statements? We have yet to agree to anything, and we must remain focused on the negotiations.” Additionally, committee members were informed that India might not suffer significant losses from US tariff threats, as there are also opportunities for India to benefit in certain areas.
Currently, India’s tariffs on US goods stand at an average of 15.30 percent (as of 2022), significantly higher than the approximately 3.83 percent US tariffs on Indian products. In the fiscal year 2024, the US was India’s largest trading partner, with exports amounting to $77.51 billion and imports at $42.19 billion.
