In August, the US doubled tariffs on Indian goods to 50 percent, including a 25 percent penalty for purchasing oil from Russia.
India-US Trade Talks: Tensions between India and the United States over tariffs continue to escalate. The US government recently imposed high tariffs of up to 50 percent on Indian exports, consisting of a 25 percent base tariff and an additional 25 percent punitive duty. This additional duty was imposed by the US as a penalty for India's purchase of crude oil from Russia.
However, following some recent positive signals from US President Donald Trump, negotiations between the two countries have resumed regarding a trade deal. Previous rounds of talks were inconclusive, but now the situation appears to be changing.
NITI Aayog CEO BVR Subrahmanyam on Monday expressed confidence that a mutually beneficial trade deal between India and the US will be reached soon. He said both countries are committed to a bilateral agreement that benefits both economies.
India needs to open its markets: Subrahmanyam.
Subrahmanyam said that India should reduce its tariff and non-tariff barriers and make markets more open to increase competition in the manufacturing sector. He made this statement during the release of the 'Trade Watch Quarterly' report. He said, "The good thing is that both sides are still committed to negotiations. Talks took place last month, so we hope to see positive results soon."
It's worth noting that in August, the US doubled tariffs on Indian goods to 50 percent. This included a 25 percent penalty on Russian oil purchases. This move escalated tensions between Delhi and Washington.
India has called the US move "unreasonable and unwise." Subrahmanyam said these tariffs won't have a major impact until Christmas, but if no agreement is reached by November, the export sector could be severely impacted.
The agreement will avert an economic setback.
He said, "We are currently at a disadvantage... The 50 percent tariff makes our goods more expensive, making it difficult to remain competitive. But if a trade agreement is reached by November, major disruption can be avoided." Subrahmanyam also added that India's trade deficit is currently manageable, but imbalances persist.
Overall, this ongoing tariff conflict between India and the US poses a challenge to both economies – but if negotiations move in the right direction, a new trade agreement between the two countries could prove to be a positive sign in the global market.
