Background on the Situation
New Delhi has proposed retaliatory tariffs against the United States at the World Trade Organization (WTO), citing that the 25% tariff imposed by President Donald Trump on automobiles and certain parts will affect $2.89 billion of India’s exports, according to an official notification.
India’s Reservation
“India reserves the right to suspend concessions or other obligations (…) that are substantially equivalent to the adverse effects of the measure on India’s trade,” according to the statement.
Details of Proposed Tariffs
The notification states that the revenue collected by the US would amount to $725 million, and New Delhi will impose an “equivalent measure of duty collected on products originating from the US.”
India has not specified the type of tariff or the products involved.
India’s Trade Negotiations with Washington
India is attempting to finalize a trade agreement with Washington before the July 9 deadline set by President Trump, after which he has threatened to impose a 26% tariff on all Indian imports. Trump’s deadline was set following India’s decision to limit certain US exports of medical devices.
India has expressed its willingness to reduce high tariffs on US goods but remains firm on not conceding to Washington’s demands of opening the agricultural and dairy sectors.
Minister Piyush Goyal’s Statement
On Friday, Commerce Minister Piyush Goyal stated that India conducts trade agreements in its national interest and is not bound by deadlines, addressing concerns about whether India would secure a deal before Trump’s July 9 deadline.
Key Questions and Answers
- What is the main issue between India and the US? The primary concern is the 25% tariff imposed by President Trump on automobiles and certain parts, which India claims will negatively impact $2.89 billion of its exports.
- What is India’s proposed action? New Delhi has proposed retaliatory tariffs against the US at the WTO, aiming to counteract the adverse effects of the US tariffs on India’s trade.
- What are the details of India’s proposed tariffs? India has not specified the type of tariff or products but will impose an “equivalent measure of duty” on US-origin products, amounting to $725 million in revenue.
- Why is India rushing to finalize a trade agreement with the US? India aims to secure a trade deal with Washington before the July 9 deadline set by President Trump, who has threatened to impose a 26% tariff on all Indian imports if no agreement is reached.
- What are the key points of contention in the negotiations? India is willing to reduce tariffs on US goods but insists on not conceding to Washington’s demands of opening the agricultural and dairy sectors.
