India-US Trade: With the 50% tariff coming into effect, Indian traders are worried about liquidity and the slowing down of orders in the short run. While the US President Donald Trump wants India to not only stop Russian oil purchase but also agree to a trade deal on America’s terms, New Delhi has indicated that it won’t bow down. It’s due to US President Donald Trump’s threats that the BRICS countries are now working closely than ever and even India and China are looking to bridge their gaps. Russia and China have already invited India to sell its goods there. Now, a commerce ministry official told news agency ANI that India is looking to diversify its trade, to minimise the impact of tariffs.
“We need to create resilient supply chains, whether these are export supply chains or import supply chains. Every challenge or crisis is a new opportunity. So it’s a wake-up call for industry, for governments, everybody, to see how we can diversify our exports,” said the official, whose name was not shared by the agency.
The Commerce Ministry official agreed that 50% tariffs are going to impact trade and added that there will be an impact on the textile, chemicals and machinery sectors in the short run, but it will not be a very long-term loss.
“The industry is worried; they have been sending representations. The industry has pointed out that in the short run, their orders will face a slowdown, and they will face a liquidity crunch. They will be under financial strain to run their operation. They have been writing to the government to help them meet this liquidity crunch in the short run,” said the official.
Govt Taking Remedial Measures
The official said that the Government of India is doing some positive work to determine the best way to implement suggestions shared by the industry. “Their suggestions are on the government’s agenda. We are trying to expedite the rollout of the Export Promotion Mission (EPM) as soon as possible, so that it will give some impetus and support to the industry,” he said, hinting at a scheme with incentives for exporters.
India-US Trade Deal
Talking about the bilateral trade negotiations with the US, the Commerce Ministry official said that tariffs have created a hurdle in the bilateral trade agreement. “Engagement between the two countries is going on. We have been progressing well and hope to return to the table soon. We may not be negotiating the (BTA) agreement right now, because negotiating the agreement will entail that the additional 25% tariffs need to be addressed. Even if you do a trade deal and the additional tariffs are in place, it will not have a significant impact on exports,” he said.
