Trump actively negotiating trade deal with India amid tariff hike
What's the story
Indian exporters are expected to be hit hard by United States President Donald Trump's latest move to increase tariffs.
His latest policy, which carries a universal 10% base tariff along with an additional country-specific duty of 17% for India, is expected to come into force next week.
However, officials from both India and the US are reportedly working out a trade deal before the deadline.
Trade negotiations
Trump actively pursuing trade agreements with India
A senior Trump advisor has confirmed that the president is "actively negotiating" trade deals with India, Vietnam, and Israel.
The Indian government is meanwhile "carefully examining" the impact of the tariffs and opportunities that could arise from it.
This includes collecting feedback from exporters and consultations with all stakeholders through the Commerce Ministry.
Tariff rationale
Trump's tariffs aim to protect US industries
Trump has called the increased duties "Liberation Day" tariffs to stop foreign sellers from taking advantage of US industries.
Despite labeling India as one of the "highest tariffing nations," he kept his tone friendly while making the announcement.
The White House said Indian tariffs have made it costly for American companies to sell their products in India. If the tariffs were removed, it could boost US exports by $5.3 billion annually.
Export impact
Tariff hike could impact Indian exports significantly
Experts have raised concerns about the effect of the higher tariff on India's electronic exports of nearly $14 billion and gems and jewelry exports of $9 billion.
The auto components and aluminum sectors are likely to take the hit of a new 25% duty as part of the announced tariff measures.
Bilateral agreement
India and US aim for a mutually beneficial trade agreement
The Indian government is trying to resolve the tariff issue through dialogue with the Trump administration, as it aims to double bilateral trade to $500 billion by 2030.
India's Commerce Ministry announced that teams from both countries are fast-tracking a multi-sectoral bilateral trade agreement.
The deal will include various mutual interests, including strengthening supply chain integration and increasing trade, investments, and technology transfers.