Summary:
Niti Aayog Programme Director, Mr. Pravakar Sahoo, stated that the United States' plan to impose reciprocal tariffs is expected to have a limited impact on India and may even open new opportunities. Major US trading partners such as China, Mexico and Canada faced tariffs between 20-25% and collectively contribute to 50% of US imports. But still India remains relatively less affected by the tariffs. While certain sectors might experience minor setbacks, the overall economic implications are projected to be minimal. A comprehensive analysis of this impact will be featured in the upcoming edition of Niti Aayog's quarterly trade watch.
The US has also enforced 25% tariffs on steel, aluminum, vehicles and auto parts, affecting multiple trade partners. However, past tariffs on China in 2018 enabled countries like India, Taiwan, Vietnam, Thailand and Mexico to expand their share in US imports. Meanwhile, India and the US continue bilateral trade discussions, with the first phase of an agreement expected by fall 2025. This initiative aims to more than double bilateral trade, reaching Rs. 42,78,000 crore (US$ 500 billion) by 2030. Highlighting India's strong manufacturing base and foreign direct investment (FDI) potential, Niti Aayog member Mr. Arvind Virmani emphasized the need to deepen trade relations with key economies, including the US, EU, Japan, UK and South Korea.
Source: IBEF
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