US President Donald Trump has recently announced the imposition of reciprocal tariffs. This step taken by Trump is aimed at correcting the long-standing imbalance in trade relations, where other countries impose higher tariffs on American goods.
According to an analysis, India charges about 10 percentage points more on American goods than the US charges on Indian goods. Along with his announcement, Trump also said that ‘if you manufacture here (America), you will not have to pay any tax.’
The impact of this decision of Donald Trump is expected to be far-reaching, with India’s food products, vegetables, textile and clothing sectors likely to be most affected. India exports products like electrical machinery, gems and jewellery, pharma products, auto, iron and steel to America. These will also be affected by the tariff.
Amidst all these changes, India is looking to reduce tariffs on around 30 products, as well as increase imports of defense and energy products from the US to reduce trade tensions.However, trade relations between America and India are quite complex.